Weekend Reading: Why Do We Keep Making the Same Investment Mistakes?

This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
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Weekend Reading

As an investor, you learn from painful investment periods in the near-term, but over the long-term, behavior doesn’t typically change.


History repeating: Whether it’s the dot-com bubble or the 2008 Global Financial Crisis, investors continue to show that the lessons of history eventually lose relevance. You may believe that “this time is different'' and the rules then don’t apply now. However, this belief is the culprit of repeating poor investment behavior.

Today’s landscape: Further, you may become incentivized to make poor investment decisions after experiencing negative performance or hearing a friend claim they made a higher return. Add to this a constant circulation of fear-inducing financial media headlines and the ability to trade in an instant, and you have a toxic behavioral environment that makes it more difficult than ever to behave well as an investor.

You will make investment mistakes, it’s inevitable. However, following a process like the Retire With Purpose framework will help provide greater structure to all of your financial decisions so you are less likely to repeat those mistakes.