What follows is a list of activities, behavior or perspectives that are harmful to your long-term wealth accumulation. You would give your financial situation a big boost if you could avoid the following:
Need investment decisions immediately validated by the market with positive short-term price movements, or feel the need to follow the consensus and chase what's hot.Demand immediate gratification, rather than greater delayed gratification.Think the stock market is a casino, where stocks are the "chips,” rather than ownership interests in real businesses whose values should be analyzed and compared to their stock prices to determine the attractiveness of the investments.Have a short time horizon, or lack patience and/or emotional fortitude.Let ego get in the way of making sound investment decisions, or refuse to ever sell losing investments that have little rebound potential until you break even; having some losers in any investment portfolio is inevitable, and tied-up capital is better utilized by reinvesting it in more attractive opportunities.Have an irresistible urge to "hop on a train already dangerously overloaded with a lot of other people before it leaves the station," without feeling a need to investigate how damaged or strained that train might be.Feel envious of other people seemingly making easy money, without considering how risky their behavior might be or how sustainable those easy gains might be.Worry more about making money than avoiding permanently losing money.Think the market fairly and efficiently prices or values stocks all the time because people are rational when making investment decisions, so that the business value of the underlying business (what you get) is always the same as its stock price (what you pay).Believe analyzing business dynamics, financial statements etc. and security analysis add little or no value to investment results, so it's irrelevant what price is paid for a stock or whether much, if anything, is known about the underlying business.Treat investing as a form of gambling.Think near-term results are more important than long-term results, because the thrill of the sprint is more meaningful than crossing the finish line and achieving one's financial goals according to a prescribed schedule.Focus on short-term account progress, so that it can serve as fodder for cocktail conversation.Treat investment progress as a horse race against neighbors, friends and relatives, rather than a wealth accumulation process with risk/reward characteristics and a time horizon that are unique to you and designed to advance your particular financial goals, rather than somebody else's.Feel the need for social acceptance by friends, neighbors and relatives, by following their investments into what's most popular at the time, rather than what's undervalued with attractive long-term appreciation potential.