In addition, they often buy and sell at the wrong times given the overwhelming psychological pull to get bullish in an uptrend or bearish in a downtrend. This can lead to additional anxiety and fear that complicates prudent portfolio management decisions. A successful investor would be looking at a 10% pullback in the SPDR S&P 500 ETF (NYSEARCA:SPY) as a potential buying opportunity, rather than an excellent entry point for a new short position.
Ultimately the choice between investor and trader isn’t a matter of which is better or can make you more money. Both roles have their own benefits and pitfalls that must be considered with care. However, staying in your lane may prove to be one of the most beneficial strategies to maintaining a healthy relationship with your money.
This article is brought to you courtesy of David Fabian from FMD Capital Management.