“…Well all my friends were doing it!”
“If all your friends jumped off a bridge, would you too!?!”
As kids, we all had some variation of this conversation with our parents, right?
So, as adult investors, we know that we shouldn’t blindly purchase a stock just because everyone else is, right? Unfortunately, no. Over time, individual investors consistently buy-high and sell-low, despite trying hard to do the opposite. The root of this trend is that, even after lectures from mom and dad, human beings find comfort in numbers.
“But Mommmm, everyone else is buying that stock!!”