15 Ways to Lose Money in Markets | Ben Carlson
Excess ReturnsOctober 10, 202400:46:15

15 Ways to Lose Money in Markets | Ben Carlson

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.

0:02:52 - Thinking you're smarter than the market
0:05:17 - Active vs passive investing strategies
0:06:35 - Market timing and extremes
0:08:02 - Trend following
0:09:04 - Chasing performance and persistence of outperformance
0:11:07 - Fighting the last war
0:13:38 - Taking advice from billionaires
0:15:47 - Worrying more about being right than making money
0:19:03 - Benchmarking against the best-performing asset classes
0:20:52 - Benchmarking for individual investors
0:22:38 - Blaming the Fed
0:24:12 - The Fed's impact on the stock market
0:27:00 - Living and dying by the short run
0:28:11 - Speculation and long-term investing
0:31:18 - Selling stocks in a bear market
0:34:50 - Thinking you're the next Warren Buffett
0:37:45 - Overreacting to market volatility
0:40:29 - Being pessimistic about everything
0:42:43 - Investing is boring, so why not speculate?
0:43:24 - Trying to get rich overnight
0:45:08 - Ben's contrarian take: Investors are well-behaved these days

BEN'S ARTICLE: 15 Ways to Lose Money in the Markets
https://awealthofcommonsense.com/2024/08/15-ways-to-lose-money-in-the-markets/

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