Part 5 & 6: The Journey of a DIY Investor | Stuck in Place

Part 5: Stuck in Place – Status Quo Bias

After suffering these losses, Mark became paralyzed by fear and uncertainty. His fear of making more mistakes led him to stick with the status quo, keeping his portfolio largely unchanged. This status quo bias left him in a stagnant position, where his investments no longer aligned with his long-term goals.

Sarah could have been the guiding hand Mark needed. Through thoughtful analysis and regular portfolio rebalancing, she would have ensured his investments stayed on track with his risk tolerance and time horizon.

Part 6: The Illusion of Control – Overconfidence Bias

As the markets began to recover, Mark regained his confidence, convinced that he could time the market. This overconfidence bias led him to make aggressive trades, believing he had more control over the outcome than he actually did. Unfortunately, some of these trades didn’t pan out, further eroding his portfolio.

With Sarah by his side, Mark would have taken a more measured approach. Sarah’s evidence-based strategies would have curbed his overconfidence, helping him focus on long-term discipline and reminding him that consistent success is rarely about market timing.