Ben Carlson, Director of Institutional Asset Management at Ritholtz Wealth and author of 'A Wealth of Common Sense', shares his expertise on investing mistakes. He discusses the risks of market timing and the pitfalls of following celebrity investors. The importance of long-term strategies shines through as he advises against selling during bear markets and overreacting to short-term volatility. Ben emphasizes the need for a tailored investment approach, valuing disciplined strategies over chasing trends.
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Smart People, Poor Investors
Doctors and engineers, despite high intelligence, often become poor investors due to overconfidence.
They assume success in one area translates to markets, neglecting that someone is always smarter.
volunteer_activism ADVICE
Avoid Market Timing
Avoid market timing, as investors often assume extreme market positions.
Most of the time, the market isn't at an extreme, making contrarian strategies difficult.
volunteer_activism ADVICE
Billionaires Aren't Always Right
Don't blindly follow billionaire investors' advice; they have different risk profiles and time horizons.
Focus on actions, not words, as public statements may not align with portfolio decisions.
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In this episode of Excess Returns, we sit down with Ben Carlson, Director of Institutional Asset Management at Ritholtz Wealth and author of the popular investing blog "A Wealth of Common Sense." We discussed his insightful article "15 Ways to Lose Money in the Markets," which outlines major mistakes investors make and how to avoid them.
We explore a variety of topics, including:
- The dangers of market timing and why it's so difficult to get right
- Why investors shouldn't blindly follow advice from billionaires or pundits
- The importance of not overreacting to short-term market volatility
- How to approach active vs. passive investing strategies
- The pitfalls of trying to get rich overnight and the value of long-term investing
- Why it's crucial to avoid selling during bear markets
- The risks of being overly pessimistic about markets and the economy
Ben provided valuable insights on each of these topics, emphasizing the importance of having a long-term perspective, avoiding big mistakes, and sticking to a well-thought-out investment plan. This conversation offers valuable lessons for investors at all levels, from beginners to seasoned professionals.
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