Treat yourself as an investment, not investor
“Generally we are good at selecting the right mutual funds for long term retirement savings. Unfortunately, our timing is typically lousy. Inherent behavioral biases such as halo effect, reference bias and overconfidence conspire against us. As a group we are excellent at buying high and selling low, the opposite of a good long term saving strategy. The costs can be staggering. Instead:
“Take a balanced approach to risk and return that suits your goals, investing experience and composure
“Create a diversified mix of funds that complement each other
“Set intervals, maybe once per year, when you stack your holdings from best to worst. Sell a little of your best performer. Buy a little of your worst performer.
“You are now selling high and buying low. A much better plan.”—Jason Lilly