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Truths of Investing?
Old 08-01-2014, 10:20 AM   #1
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Truths of Investing?

I thought this was one of the better articles to appear on Yahoo Finance.

Investors learn important truths, but we sometimes choose to suspend this knowledge when it feels better not to be encumbered by it. As an investment advisor, I come into contact with this phenomenon on a daily basis. No one is immune to it, myself included.

Below are seven essential truths of investing that we are all aware of, but cannot accept at all times, no matter how much evidence we’ve seen.

It's worth reading if you have a chance, and as always, the discussion this forum is far superior to the comments on the articles themselves.

From the article without the author's commentary, the list of truths:

1. Anyone can outperform at any time, no one can outperform all the time.

2. Persistence of performance is nearly non-existent.

3. Taxes and commissions matter.

4. Smart doesn’t equal good.

5. Incentives matter.

6. The crowd is always at its most wrong at the worst possible time.

7. Fear is significantly more powerful than greed.

7 (a). There is no pleasure without the potential for pain.

How about you? Do you buy these truths?

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Old 08-01-2014, 10:41 AM   #2
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Sure, I believe those truths.

Charles Schwab wants you to think your active trading is going to help you, Vanguard wants you to think you should never place a trade so long as you live.

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Old 08-01-2014, 11:17 AM   #3
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Past Performance is No Guarantee of Future Results

In real life past performance matters. We promote somebody who did a good job.

But in investing opposite seems to be truth...... It is hard for us to accept.
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Old 08-01-2014, 11:33 AM   #4
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Speaking of past performance. How about this study of penalty kicks in soccer:
Why footballers should always take a penalty to the same corner - Telegraph
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