Inaction Can Be Action

Sometimes, doing nothing is the best strategy in investing; avoiding hasty market actions can prevent losses. Rebalancing is a proactive method to maintain desired asset allocation without emotional interference, helping to buy low and sell high systematically. Tax loss harvesting, selling investments at a loss to offset gains, is another effective tactic for tax management without major portfolio adjustments. Despite the allure of constant information for improved decision-making, excessive knowledge in investing can lead to worse performance, as frequent trading often results in lower annual returns due to transaction costs and poor timing.