Tag Archives: lost decade

The Cost of Performance Chasing

As the market rally persists, many investors will no doubt be kicking themselves and wishing that they had bought in earlier.  Some will convince themselves that they better get on board or risk missing out on this bull market.  There are many good reasons to invest money, but choosing to get in because of the potential gains that you could have made is not one of them.  In the same way that people capitulate and sell out near market bottoms, there is also a big behavioral driver that seems to make people capitulate and join the herd towards the end of big bull markets.  I am not saying that we are poised for decline (I am not a good market timer), but simply noting that buy or sell decisions made on the basis of what you wished you had done last month or last year is often truly dangerous.  Continue reading