10 REASONS

WHY 90% OF
INVESTORS LOSE MONEY
IN THE STOCK MARKET

GAV BLAXBERG
I’ve worked at
Goldman Sachs and
helped manage
over $5.5B.
Here are 10 reasons
why 90% of investors
lose money in the
stock market:

GAV BLAXBERG
 THEY DON’T
1 UNDERSTAND THE
INVESTMENT

If you don’t know how a

company makes money, you
won’t know how it can lose
money.
This adds unnecessary risk to
your investment plan.
Risk that can be avoided, but
often isn’t, and why most
investors are losing money.

GAV BLAXBERG
2 THEY SELL AT THE
WRONG TIME

There are only 3 reasons to

sell an investment:
You found a better
opportunity
The fundamentals
changed
You met your goal
All have everything to do with
your investment strategy.
Neither have anything to do
with the stock price.

GAV BLAXBERG
3 THEY INVEST ON
EMOTION

A falling stock price doesn’t

mean sell.
Especially if the company
didn't change.
And a rising stock price
doesn’t mean buy.
Especially if the business is
still run poorly.
Stocks are volatile in the
short term, but the long-term
trajectory is up.
GAV BLAXBERG
4 THEY WANT TO
BREAK EVEN

Breaking even is when you

refuse to sell a stock until it
returns to its original price.
When you do this, you lose
money through:
Bigger losses
Opportunity cost
Not all stocks recover.
And sometimes your money
can get a better return
elsewhere.
GAV BLAXBERG
 THEY INVEST WHAT
5 THEY CAN’T AFFORD
TO LOSE
Investing is risky.
You’re never guaranteed to
profit.
You might even lose money.
So when you invest money
you need in the next 3-5
years, you could end up with
less than you originally
invested.
Now your losses are locked
in.
GAV BLAXBERG
6 THEY DON’T KNOW
THEIR TIME HORIZON

If you don’t need the money

for 10+ years, it doesn’t
matter if the stock market is
up or down today.
And if you need the money in
3-5 years, you shouldn’t be in
100% stocks.
Figure out when you’ll need
the money, then invest
accordingly.

GAV BLAXBERG
 THEY DON’T KNOW
7 THEIR RISK
TOLERANCE
Your risk tolerance depends
on:
Age
Cashflow
Time horizon
Appetite for risk
In general, if your risk
tolerance is low, you should
take on less risk.
And if your risk tolerance is
high, you can take on more
risk.
GAV BLAXBERG
8 THEY FOLLOW THE
HERD

Just because someone did

the research doesn’t make it
good research.
And just because a lot of
people are buying/selling a
stock doesn’t mean you
should too.
This is why market bubbles
and market crashes exist.
Too many people invest
blindly.

GAV BLAXBERG
9 THEY CHASE
PERFORMANCE

The goal of every investment

is to generate future returns.
But when you chase
performance, you’re chasing
past returns.
So when you buy an asset
that already did well, you can
be certain you missed the
run up, but not whether there
will be another.

GAV BLAXBERG
10 THEY’RE
IMPATIENT

Building wealth is a
marathon, not a sprint.
This is especially true for
young investors with long
time horizons.
So if you need the money
now, it shouldn’t be invested.
And if you don’t need the
money, you shouldn’t be
trying to get rich quick.

GAV BLAXBERG
TL;DR:
90% OF INVESTORS LOSE
MONEY BECAUSE THEY:

1. Don’t understand the asset

2. Sell at the wrong time
3. Invest on emotion
4. Want to break even
5. Invest too much
6. Don’t align time horizon
7. Don’t align risk tolerance
8. Follow the herd
9. Chase performance
10. Impatient
GAV BLAXBERG
Thank you for reading!

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