How can it be that investors who have a knack for picking winners end up losing money? We can blame the brain – and learn some simple strategies to rewire it.
No matter who said it first, “cutting the flowers and watering the weeds” is a perfect analogy for a terrible investor weakness – selling winners too soon and holding on to losers.
“Over time, that will bias your portfolio to increase your weight of losers over winners,” says Katie Hudson, head of Australian equities research at Yarra Capital Management and co-portfolio manager of the UBS Australian Small Companies Fund. “Obviously something to avoid.”
Jeremy ChunnContributorJeremy Chunn writes on personal finance specialising in financial services, specialist investments, fixed income. Connect with Jeremy on Twitter.
