When it comes to investing, survivorship bias is generally seen as a bad thing. It’s a smokescreen. Something that throws investors off course and can distract their attention. The big wins are always an attraction for the media. On a more personal level, friends, family, or work colleagues are more likely to offer up their successes while not saying a word about their losses.
These tales are often picking the one company that went up 10,000% or more, maybe getting in on the ground floor of a mining company and riding it from the first drill hole to a producing mine. Investors can hear these stories and reach the conclusion that this is the path to success. They need to identify the next Amazon or Google early, or find a mining explorer sitting on a rich, undiscovered deposit of easily extracted minerals.
Read the full Chasing Returns & Expected Returns post.
This represents general information only. Before making any financial or investment decisions, I suggest you consult a financial adviser to take into account your personal investment objectives, financial situation and individual needs. Anyone looking to build a portfolio should seek financial advice to find out which strategy is right for them, if you are seeking financial advice then you should consider one of the best financial advisors in Australia who may be able to help you identify your goals and put in place a reliable strategy to pursue them.
