Most financial advisors and investors get a false sense of security by believing that the more movement you make in your portfolio the more in control you are and the better your portfolio will perform. If are constantly moving, you are actually doing something.
It’s a feeling of control, like pulling the arm of a Vegas slot machine. However, some activities create negative results and actually reduce your control. This is actually “out of control” behavior and actually reduce the amount of control you actually have. The only worse than doing nothing is doing the wrong thing over and over. More trading may “feel” like control, but its dysfunctional.
As an investor, it is critical to understand that your brain is hardwired to seek choices, even if they are counterproductive. The financial industry is all too eager to provide thousands of choices to encourage you to trade in order to maintain the false sense of control that activity creates.
The hardest thing for investors to do is to stay disciplined and “sit on their hands”.
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