Retail investors make the same mistakes over and over again, according to Barry Ritholtz, Chief Investment Officer at Ritholtz Wealth Management. Ritholtz said for many investors, emotions dictate trades, rather than logic. ‘They’re emotional and engage in all sorts of bad behaviors in reaction to those emotions, as opposed to being thoughtful and rational,’ explained Ritholtz. ‘And long term they’re basically just giving in to their gut reactions.’ Ritholtz pointed out that investors too often focus only on the short term. ‘There’s a real tendency to obsess about every news release, every tick, every little movement in the market, when, you go back and look at a long term chart of markets and things like the Kennedy assassination and 1987 crash, they’re barely visible on a long term chart.’ Ritholtz used investors’ obsession with Apple (AAPL) stock as a case in point. Ritholtz spoke with TheStreet’s Rhonda Schaffler at Camp Kotok in Maine.
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