Emotion sickness

We are all prone to making mistakes when investing, not because we are foolish, but because we are human. Dr Benjamin Holdsworth shows how to adopt a disciplined approach.

‘If I have learned anything in my 52 years in this marvellous field, it is that, for a given individual or institution, the emotions of investing have destroyed far more potential investment returns than the economics of investing have ever dreamed of destroying.’ John C. Bogle, founder of the Vanguard Group and investment ‘legend’.

Being an investor is not easy. We have to contend not only with the erratic and unpredictable nature of markets but also the erratic and irrational way in which we think and behave.

This manifests itself in different ways among the broad investing population: