Chat with Sabrina: stock exchange maxims

There’s a stock exchange maxim that says “too much trend-chasing leads to the poorhouse”. What does it mean? And is there any truth in it?

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“Too much trend-chasing leads to the poorhouse” means that frequent buying and selling of securities has a negative impact on the portfolio’s performance. One reason for this is that fees are charged for every transaction. In the long run, this eats away the return on investment.

As a private investor, you should stick to a long-term investment strategy instead of following short-term trends or being guided by your emotions. This requires discipline, but it pays off in the long run.

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