Avoid Water Cooler Advice
My book, “Investment Mistakes Even Smart Investors Make and How to Avoid Them,” covered 77 common errors I believe investors commit all too often. I know today there’s at least one more I should have included: discussing individual stock buys or sells at the water cooler.
Evidence from the field of psychology emphasizes the strength of face-to-face communication between individuals who frequently interact in producing and altering beliefs. Specifically, as it relates to investing, the study “Social Interaction and Stock Market Participation,” which appeared in the February 2004 issue of The Journal of Finance, found that social interaction leads to greater stock market participation.
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