According to Joachim Klement, investment strategist at Liberum, making mistakes is a key part of building out a bulletproof investment strategy. In a career spanning 20 years – which include roles such as managing director at Credit Suisse, CIO at Wellershoff & Partners and head of strategic research at UBS – Klement has learnt to love mistakes.
In his latest book, he explores “a very subjective selection of the seven biggest mistakes I have made in my career as an investors”.
But these mistakes aren’t used to Klement – on the contrary, he believes this list features some of the most common mistakes that a great number of investors are making.
One of the most common, he suggests, is investors looking at their portfolios too much.
Klement recalled the market crash in March. “We all get worried in these situations — I am no different than anybody else. The temptation is to look at my portfolio and see what it’s done. Obviously, if you do that and see it’s down 10% or 20%, or 25% then the temptation is to sell something.”
But this isn't necessarily the right way to respond, Klement explains. “You typically [end up selling] at a really bad time, simply because you looked at your portfolio constantly.” This, he says, leads people to miss out on what might happen next, when markets rebounded with a vengeance.
“As a result, [these investors] compounded their losses by just basically looking at [their portfolio] too often,” he says. “This is something I’ve been guilty of in the past and that I’ve seen a lot of people doing in this crisis.”
To hear more of the common mistakes that investors make, and how they can spot these patterns, listen to the full podcast, here.
Or for more ways to listen:
Klement’s book, Seven Mistakes Every Investor Makes (and How to Avoid Them), is available via the Harriman House bookshop. Opto subscribers can save 25% on their orders and get free postage and packaging by quoting promo code Opto25. This offer ends December 2021.
Listen to the full interview and explore our past episodes on Opto Sessions.