Bad investment performance? Why is that: many bad decisions? Or just one or two bad ones? Solid but unlucky decisions? And is it with respect to instruments selected? Or sector choices? Or maybe even at an asset class level?
And that good investment manager you chose…why did he perform so well? Very good at picking stocks or made a big bold bet on styles knowing that “head we all win, tail only you lose”?
If you are not yet asking yourself these questions, it may be worth starting to, to make sure you have risks and costs in your portfolio more under control by developing a framework to analyse and review these aspects of your investments, individually and as a whole.
And when it comes to investment decisions, we cannot ignore how our brain functions, with its analytical power as well as its shortcuts and related psychological biases, systematic deviations from rational decisions. There is a bunch of literature around, popularised by recent Nobel prize winner like Kahneman and Thaler, recommended reading, in the worst case at least to help you fall asleep). But after you’ve read these, the hard part is to put things into practice – exactly because biases are natural, energy-efficient, it requires significant effort to increase awareness and compensate or even remove them, and a coach can help you in this journey with trainings, insight and support.