Myths versus Mistakes in Investing

Riot of 

 Passive Muffs and Active Goofs 

 in Financial Markets

The financial markets abound with beguiling myths and wanton mistakes. The two kinds of stumblers – namely, fables and bungles – are distinct as well as entwined. The slew of snags act singly as well as jointly to trip up all manner of investors ranging from rank amateurs to badged professionals.

The multitude of pitfalls may be classified into a couple of broad groups. A myth conveys a false view of the marketplace while a mistake denotes a bum move harmful to the investor. The former is a passive flub while the latter is an active goof.

The two types of spoilers run riot in isolation or combination. For instance, a tall tale may bedevil an investor without giving rise to a costly mistake. On the flip side, a wrackful move could arise in the absence of a slippery myth. In other cases, the two forms of sinkers work together to foil the hapless investor, thus fouling their agenda to varying degrees ranging from patchy losses to complete wipeouts.

From a larger stance, the awesome complexity of the real and financial markets hamstrings any attempt to drum up a cogent program of investment. The actors floundering in the mire run the gamut from dewy-eyed tyros puttering in their spare time to wizen pros plying their trade the whole day long.

Whatever the scope of experience in the field, the mass of participants succumbs to both kinds of muck-ups. As a safeguard, the first task of the canny player is to recognize the welter of hidden traps along with the mordant wounds they inflict. In this treacherous environment, a solid grasp of the myths and mistakes is a basic requirement for avoiding the sinkholes and escaping the minefield.


NOTE:  The full article is available as a Web page at MintKit Core. As an alternative, the same material appears as a document in PDF form at Scribd. 

REVISED:  2021/4/11. 

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Market Myths

Fairy Tales Mislead Investors of All Types

The world of investment is a hothouse of myths that belie the reality of the financial markets as well as the real economy. The billow of fairy tales pervades the entire
landscape, ranging from stocks and futures to commodities and currencies.

The bluster of fiction serves to fuddle and stymie investors of all breeds. The players in a bind include newcomers dabbling in the market in their spare time as well as veterans bent on trading the whole day long.

The worst of the folklore can be traced to a pile of voodoo spawned by the high priests of financial economics. The tall tales spun by the hoary clergy run the gamut from the
mystique of random walks to the impossibility of superior returns.

Not surprisingly, the heap of bunk confuses rather than enlightens the luckless investors. In fact, a host of shibboleths do not merely distort the reality but contradict the facts entirely. The hail of obfuscation feeds a quagmire that’s in many ways more slippery and treacherous than most people suspect.

On the upside, though, the financial forum is not as fickle or mystic as it appears to lots of folks, be they wild-eyed tyros or jaded pros. To approach the field in a cogent way, the earnest player can take concrete steps to sort out the wheat from the chaff, the signal from the noise. In thrashing out a sound trail through the thicket of hokum, the first task of the investor is to thresh out the solid facts from the mushy yarns piled high and wide throughout the landscape.

Read more on Market Myths.

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