The WSJ asked an interesting question of its readers recently:


Hat tip Dorsey Wright

Category: Mutual Funds, Psychology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

11 Responses to “What’s Your Biggest Fund Investing Error?”

  1. crutcher says:

    Missing is f) investing in a fund.

  2. LOL Well, you know I suggest passive over active for the vast majority of investors

  3. Roanman says:

    I cut and pasted this from the comments section of the original piece as it made a lot of sense to me.

    WallStreetRanter says:
    October 4, 2012 at 11:20 am
    I would contend that what the answers to this poll really reveal is that investors biggest mistake is actually RECENCY BIAS! Why? Because it is only NOW that investors feel their biggest mistake is being too cautious. I GUARANTEE that if this was asked in March of 2009 their answers would look MUCH different. There is no way that in march 2009 people would be saying that their biggest investing mistake was being too cautious.

  4. microcap says:

    Loved Crutcher’s answer :)

    If I could add a g)– Investing in a fund I didn’t really understand.

    Best wishes to BR and all…

  5. InterestedObserver says:

    Interesting in that the leader – being too cautious – isn’t something I’d call a mistake per se.

    If you view yourself as too cautious in hindsight, it says you weren’t prepared to bear the risk when it was genuine risk. After the fact, when all was said and done and the missed opportunities were clear, it’s regret for the path not taken.

    I can see lots of folks flipping from this state to the equally bad first option – buying too late post run-up – because they’re chasing what has already happened, not what’s coming.

  6. wrongtrade says:

    I agree with the commenters above, that “being too cautious” is likely a euphemism for “I panicked and sold at the bottom and didn’t get back in at the right time, or ever.”

    Similarly, hiring or firing the manager too soon or not soon enough is just another way to say “didn’t let winners run” or “held on too long” which are inherent market risks whether in a fund or not.

  7. wrongtrade says:

    I would add that this discussion is a primary example of why I read good financial blogs and NOT the lame stream media- my WSJ subscription is canceled.
    If they were serious about this topic and went with it despite the obvious recency effect and failing to ask the most important question (I.e. why buy a fund and especially managed fund at all) then that’s poor journalism.
    If the point of the exercise is to to just sop fund mangers and fund companies as their business paradigm wilts then it’s inexcusable.
    What if the point of the exercise was so bright, so insightful that the authors just KNEW it would lead to not only a stimulating discussion of funds, but point out, in a broader context, some human and statistical…… NAHHHHHHHHHH!!!!!

  8. wrongtrade says:

    Theodoric of York, medieval barber

    Sorry about the ad, I am not smart enough to get around it.

  9. given the Season..I’d say “crutcher” scored 6 Points. (Touchdown~!)

    though, then again, there’s yon’ QOTD to reflect upon..

    “Too many of us look upon Americans as dollar chasers. This is a cruel libel, even if it is reiterated thoughtlessly by the Americans themselves.”

    —Albert Einstein

  10. VennData says:

    Wrong trade is not only right, but I’d wager that among the others, they haven’t “gotten back in” either, but think it was smart to miss this rally because it’s going to give it all back next week.

  11. Bob A says:

    Be interesting to have the same figures from four years ago.
    Don’t think they’d be the same.