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Paul Sobotta, CLU®, ChFC®, CFP®, RICP®
Financial Planner
CA Insurance Lic. #4169793
Kyle Sobotta, CFP®
Financial Planner
Prudential Advisors
205 Washington Street
Arcadia, WI 54612
Phone: 608-323-7032
Fax: 608-323-7964
Email: paul.sobotta@prudential.com
November/December 2024
Don't Be Your Own Worst Investing Enemy
Many investors aim to have their gains match or beat a standard investment benchmark. According to Dalbar's annual Quantitative Analysis of Investor Behavior, 2024, the average investor falls short, earning 5.5% less than their targeted stock benchmark and 2.63% less than their chosen fixed income benchmark.
Behind the Statistics
Often, investors weigh emotional behavior and personal recommendations too heavily against the knowledge and experience of investment professionals. Look at the checklist to see if this could be you.- When deciding whether to sell a stock, you may be emotionally fixed on the price you paid for it and avoid selling so you don’t regret having made a “bad” investment and incurring a reportable loss.
- Mental accounting, using prior gains, can make you hesitant to sell an investment that’s had significant gains but now has more modest ones. You can’t accept the thought of a smaller profit margin, even when signs indicate the value could fall further. Remember, past performance of any investment doesn’t guarantee future results.
- Paper losses stress people more than gains to the extent that you often prematurely sell an investment with signs of regaining and possibly exceeding former gains.
- Being too quick to jump on the latest trend or family or friends’ recommendations without thorough research and talking with your financial professional first can be detrimental to achieving your goals.
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