‘I am afraid of creating the fallacious determination’: I am obsessive-compulsive — and purchase shares primarily based on an odd components. Is that this regular? How do I cease?


I have certain personal psychologies and behaviors that upset me when investing. How do I overcome this? Can you help me with mine I’m not talking about general mistakes that people make, such as the fallacy of sunk costs, but about personality traits and quirks.

In my after-tax accounts, I usually did the following: I buy a share of a particular stock / ETF, and then I stop buying shares until they drop below the price I bought.

I don’t have this problem with my retirement accounts. I’ve only cost an average of dollars every two weeks, hell or flood, and those accounts have grown significantly over two decades since I’ve been at it for the long term.

“I’ve seen a few posts saying people are going into therapy for investing / money management, but that seems like an exaggeration.”

Still, I’m sitting on a large amount of money that was not invested because of this behavioral scam. It’s very intense, maybe halfway to an obsessive-compulsive disorder / addictive trait. To get the “same” fund, if the price goes up, I switch funds and buy another S&P 500 SPX, + 0.72% fund, so my starting price is higher.

How crazy is that So I could buy SPDR S&P 500 ETF Trust SPY, -0.01% at a certain price and once it is way above that and has less chance of setbacks (by 20% or more) then I buy iShares Core S&P 500 ETF IVV , +0.74%,

How do you solve this? I see an overlap between investing / trading and addictive behavior; Therapy, awareness, higher power, hypnosis, etc. are some of the strategies people use.

I’ve seen a few posts talking about people going into therapy for investing / money management, but that seems like an exaggeration. I use the internet (social media) to get input, which sometimes lets me make decisions. The problem is, these are personality defects, not investment problems.

A related problem for me is that I am afraid of making the wrong decision: I am constantly worrying about my decisions. So I’m like a deer frozen in the headlights when it comes to investing.

Hirsch in the headlight dealer

Dear dealer,

You are the prime contender for a robo-adviser plan. They give you cheap financial advice and can help automate some of your fears and, therefore, your investment decisions. Buy stocks when you think they’re going to go up while keeping the big picture and long-term view in mind. Chasing short-term fluctuations will blow you up the wall. Emotions and finances are undesirable bedfellows.

Whether it’s arranging the spice rack alphabetically, having tea and cookies at 11 a.m., or – in your case – obsessively following the stock market, people want some order to the chaos and uncertainty that surrounds them. Whatever strategy you employ is an attempt to control something that is ultimately out of your control.

We cannot control global supply chain problems, inflation rates or wild stock market fluctuations, or the cyclical effects of an economy recovering from a dramatic downturn during a pandemic. Weird habits and obsessive behavior give us the illusion of control. They help us feel safe, but we are not God, so we’ll try again.

You need to be aware of why you are doing something and what the reward is – whether or not it is successful – and be ready to do whatever it takes to break the habit, especially if it is slowly eroding your peace of mind in order to conquer it. By immediately rejecting the idea of ​​therapy, you are putting your obsessive-compulsive behavior above everything else.

“Weird habits and obsessive behavior give us the illusion of control. They help us feel safe, but we are not God, so we’ll try again. ‘

Your habits keep you engaged and stimulated and give the false impression that you have found a magical way to time the market. But if they are taking up a lot of time and space in your head unhealthily, ask yourself whether it’s worth it and what can you do about it. There is some research into stock trading as a pathologically addictive or compulsive pastime.

This 2016 article in Addiction & Health magazine asks whether or not a person’s trading is problematic. Most important of them: Are you involved in compulsive daily trading as your main activity in life and / or, as the researchers put it, “Have you constantly thought about reliving past trading experiences, analyzing or planning the next business? “

The researchers set aside other red flags of potentially addictive stock trading, including the need to spend increasing amounts of time and money trading in order to achieve the desired levels of excitement; Trade when you are feeling stressed or anxious / depressed; Loss of interest in previous hobbies and activities; and become restless and dissatisfied when attempts are made to limit.

“If it’s taking up a lot of time or space in your head unhealthily, ask yourself if it’s worth it and what you can do about it.”

Obsessive-compulsive disorder is a serious diagnosis and condition, and we should be careful to use the term casually. “Obsessive-compulsive acts related to obsessive-compulsive disorder interfere with normal daily activities. A diagnosis of obsessive-compulsive disorder requires that the obsession or compulsions last more than an hour per day and cause great suffering or problems at home, at work, or in other functions, ”according to the American Psychiatric Association.

The good news: you haven’t lost a lot of money. In fact, your slow and steady approach has paid off. You also seem confident enough to know that your habits – whether they are addicting or not – are interfering with your daily life and happiness. When you invest money, you should feel more secure and carefree about living your life, and not the other way around.

Trading has gotten easier for millions of people and has resulted in some shocking losses. Take this Russian, who reportedly lost around $ 50 million day trading and ended up being sued by his mother. Or that rookie trader who turned $ 15,000 into $ 1 million and then lost almost everything. His knowledge from experience? “It’s like trying to beat the casino.”

Don’t turn your living room into a casino. Your peace of mind seems to be the only thing affected, at least for now. Act now while you are ahead. Talk to a financial therapist about what’s going on. The best / worst that can happen is that you learn some fascinating and insightful things about yourself. Let’s face it – they’re a much more interesting puzzle than the stock market.

You can email The Moneyist at qfottrell@marketwatch.com with any financial and ethical issues related to the coronavirus and follow Quentin Fottrell on Twitter.

Check out Moneyist’s private Facebook Group in which we look for answers to life’s thorniest questions of money. Readers write to me with all sorts of dilemmas. Ask your questions, tell me what you want to know more about, or take part in the latest Moneyist columns.

The moneyist regrets not being able to answer questions one by one.

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