Aaditya Chhajed, CA, CFA

What investing behaviors undermine investment performance? Following nine investing behaviors that can undermine investment performance. Active Trading:  An investor using an active trading investment strategy engages in regular, ongoing buying and selling of investments. This kind of investor purchases investments and continuously monitors their activities in order to take advantage of profitable conditions in the market. Active trading generally results in the underperformance of an investor’s portfolio.

Reading Time: 10 minutes. Why are we so bad at separating luck and skill? Why are we so uncomfortable knowing that results can be beyond our control? Why do we create such a strong connection between results and the quality of the decisions preceding them? How can we avoid falling into the trap of the Monday morning quarterback, whether it is in analyzing someone else’s decision or in making and reviewing the decisions in our own lives? Poker vs. Chess Chess, for all its strategic complexity, isn’t a great model for decision-making in life, where most of our decisions involve hidden information and a much greater influence of luck. This creates a challenge that doesn’t exist in chess: identifying the relative contributions of the decisions we make versus luck in how things turn out. Poker, in contrast, is a game of incomplete information. It is a game of decision-making under conditions of uncertainty over time. The quality of our lives is the sum of decision quality plus luck. Von Neu...