It's great to be confident about your finances. But being too confident about investing can backfire on you.
Australian money photo by Shutterstock
Sometimes when our investments do well, we start to credit our own skills, rather than the market, with that progress. MoneyNing explains why this can be dangerous:
It can lead to you taking bigger and bigger risks with your portfolio. When you think you're a stock-picking genius, there's a tendency to assume you can do no wrong…. it becomes dangerous when you start to change your asset allocation and experiment with money you truly need.
While you might do well for a certain period of time, at some point there will be a down day and you will lose ground. If you reach this point and panic, you could do even worse — and find yourself in deep trouble, locking in losses.
It's a reminder that solid, no-fuss investing is the right plan for most of us. Check out the full post for more detail.
Investors, Watch Out for This Fatal Flaw [MoneyNing]