Early in my career I was given a great piece of advice — if you want to learn, just keep asking questions. Some people are nervous that they’ll sound unintelligent by asking too many questions but I’ve always found that asking questions is a true form of intelligence. It shows that you care about the subject matter and would like to improve and learn.
Investors are constantly in search of THE answer, but most of the time they’re asking the wrong questions or not asking any at all. Here are some underrated questions that most investors don’t bother asking themselves:
What if I’m wrong?
What are this person’s incentives for giving me advice?
What are the all-in costs for my portfolio?
What’s my reason for making this purchase or sale?
Maybe I should give myself a few days before making this change to my portfolio?
What’s my time horizon on this investment?
Does this strategy fit my personality or is it a case of a square peg in a round hole?
When will I sell this investment?
Have I looked at both sides of this trade?
How will I react if the markets don’t cooperate with my thesis?
Am I saving enough money?
Am I blaming others for this mistake instead of taking responsibility for my own actions?
How much will this change in my portfolio really affect my performance?
What is my asset allocation including all of my investments?
What’s my edge in these competitive markets?
What does the party on the other side of this trade know that I don’t?
Am I listening to the right sources when taking financial advice?
What’s my maximum pain threshold for losing money?
Am I looking at the market value of my portfolio too often?
Do I understand the risks and expected returns for this asset?
Could I explain my investment strategy in a 30 second elevator pitch?
Do I have a reasonable time frame in mind for my portfolio?
What is the underlying liquidity in this investment vehicle?
What are the tax complications?
Am I being patient or just stubborn?
Am I diversified enough?
What are the alternatives to this investment?
Will my assets cover my future liabilities?
Do I understand the risks involved with this strategy?
What’s my investment philosophy?
Am I trying too hard?
Does this person offering advice on TV have the same time horizon as I do?
Am I anchoring to current or past price points?
Are this portfolio manager’s past results too good to be true?
Am I allowing my confirmation bias to cloud my judgement?
Am I the sucker here?
Am I chasing past performance?
Am I imagining that past market scenarios were easier than they really were at the time?
Is this data important or just interesting?
Am I working with a marketing firm or an investment firm?
How did I react during past periods of market turmoil?
Do I really understand my appetite for risk?
Am I practicing first or second level thinking?
Does this person have my best interests in mind?
Can I stick with my process when things don’t go as planned in the future?
Am I anchoring to a bad investment or staying disciplined to a good process?
Lies Investors Tell Themselves
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