Quote of the Week
There is no problem so bad, that you can’t make it worse.
Former astronaut Chris Hadfield in this interview with Fresh Air’s Terri Gross.
A simple but powerful insight that is applicable to many of life’s undertakings in addition to space travel, but without a doubt to investing. I’d call it the equivalent of the medical profession’s “first, do no harm.”
There is an incredible urge to activity by investors. In the face of a falling market, or of a portfolio that is lagging in a rising market, the temptation to do something, to do anything, is often overwhelming, when generally the best course is to do nothing. This urge to activity is a well-documented behavioral trap that professionals are as susceptible to as non-professionals. I liken over-activity in investing to frequent lane changing on a crowded and fast-moving freeway. You think you are getting ahead, when actually all you are doing is greatly increasing your odds of having an accident.