I love this headline I saw from MarketWatch: “Be a better investor, dump your iPhone.”
To me, this is really a story about men and how they invest. The problem is that guys are very emotional and driven with investing and they wind up being their own worst enemy.
Guys want to pretend like they’re emotionless rocks. That’s not true when it comes to investing; ego, emotion and adrenaline all conspire against men. The reality is by treating investing like a sport, men end up costing themselves roughly 20% of their future wealth, according to MarketWatch.
Now you have all the various brokerage houses adding apps for iPhones and Androids that allow you to trade on a second’s notice. The danger of these apps is that they put people into an impulsive spot where they make decisions divorced of strategy or a sense of time horizon for retirement.
As the MarketWatch article pointed out, guys tend to look in rearview mirror with investing. They just do what’s been proven in the past. That’s why a lot of gold frenzies are driven by men; they’re just following numbers that show a value that’s already baked in the cake.
Women on the other hand play it too safe when it comes to investing. Men, on the other hand, tend to swing for the fence. But instead of either extreme, you should be focusing on the goal of building wealth for the long term.
Have a strategy that includes well diversified holdings and contribute to them every month or every pay period. I know it’s dull and it doesn’t give you bragging rights for making a big score. But that’s what’s going to give you financial security.
Editor’s note: Today’s show originally aired July 2011.