Break Free from Superstition in Investing

Julia Carlson |

If you’ve ever heard that walking under a ladder is considered bad luck or that Friday the 13th is considered unlucky you are already aware of superstitions. Superstitions can be a fun and interesting way to learn about different cultures and beliefs. The idea that specific thoughts or actions can influence future events in a way that cannot be explained by natural or scientific laws and principles is found in cultures worldwide. These quirky ideas can add a bit of excitement and mystery to life but be cautious where superstition and investing meet!

While superstition and investing may seem like two unrelated things, many investors believe in superstitions and let them influence their investment decisions. For instance, some investors believe in their gut feeling and let it guide their investment decisions. They may buy a stock because they have a good feeling about it, even if the fundamentals of the company are not strong. Others may have past experiences that dictate their actions, an investor that had a personal experience with the stock market and had positive returns is more likely to stay invested versus somebody who associates the stock market with negative returns.

While there is no scientific evidence to support any of these superstitions, many investors still believe in them. Some investors believe that superstitions can help them to make better investment decisions, while others simply enjoy the sense of tradition and community that comes with following them.

Financial experts generally agree that it is not a good idea to let superstition influence your investment decisions. Investing should be based on sound financial analysis and research, not on superstition.

Superstitions can lead to investors making irrational decisions that can cost them money. For example, an investor who believes that a certain number is lucky may be more likely to invest in a stock with that number in the ticker symbol, even if the stock is overpriced or has poor fundamentals.

Superstitions can also lead to investors missing out on investment opportunities. For example, an investor who believes that Mondays are a bad day to buy stocks may miss out on buying a stock that is undervalued on Mondays.

Superstition can spice up your life but if you are considering investing, it is important to do your research and make decisions based on sound financial analysis. Good luck!

Information in this material is for general information only and not intended as investment, tax, or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.

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