The High Cost of Bad Buy/Sell Decisions Makes Sense of Finances

 - Apr 4, 2012
References: jemstep & jemstep
The High Cost of Bad Buy/Sell Decisions infographic details how to bring one's financial portfolio into better shape and how to avoid making bad investments.

Created by Jemstem, the chart details what decisions are the most damaging to one's financial health. Comparing the average investor with ones that keep their money in the S&P 500, the chart shows that people who try to time the market (in essence, buying low and selling high) only made a 1.9% return on their investment while their counterparts made an 8.4% return.

The High Cost of Bad Buy/Sell Decisions also notes that the majority of poor decisions are made using emotional biases such as loss aversion, overconfidence and anchoring all of one's capital to a small number of companies. The chart advises instead, to stick to a long-term investment plan that is reasonably diverse for the ultimate financial return.