08 Sep Over-Confidence

Curious Investor Behaviour – Number 4

Over-Confidence

According to multiple studies into human behaviour, the majority of people consider themselves superior in most day-to-day activities – for example, over 90% of drivers believe they are better than average! Over-confidence is a particularly dangerous trait in the field of investment. It leads to over-estimation of one’s knowledge and under-estimation of risk. In the late nineties,many investors enjoyed exceptional paper profits in technology stocks and attributed their successes to their ability.

As one astute observer put it, aim for timid forecasts and bold choices. In other words, under-estimate your knowledge and over-estimate risk.

Disclaimer: Platinum Asset Management Limited ABN 25 063 565 006 AFSL 221935 (Platinum ®) has commissioned this illustration  for your reading enjoyment. There is no intention to provide investment advice, and information presented does not take into account the investment objectives, financial situation and/or particular needs of any person or class of persons. Platinum offers financial products. Further information and a Product Disclosure Statement can be obtained from www.platium.com.au or by phoning 61 2 9255 7500 or 1300 726 700. Before making any investment decision, it is important that you consider (with your financial adviser) your particular investment needs, objectives and financial circumstances. Platinum is a member of the Platinum Group of companies. 

About Reuben Zelwer   Reuben Zelwer established Adapt Wealth Management in 2011 to help time poor clients achieve financial freedom. For over 15 years, Reuben has helped professionals, executives, business owner and those approaching retirement make the most of their circumstances by making good financial decisions. Reuben’s professional practice is complemented by substantial voluntary work, which has included setting up financial literacy and savings programs in the local community.