VantagePoint: Avoiding Five Key Investment Pitfalls

Published on January 27, 2025

The start of the year is an ideal time to review investment practices and procedures to ensure you are set up for success. Investing is challenging, even for the most seasoned investors, given the underlying emotions and mental biases inherent in human decision making. Successful investors have explicit investment processes that are clearly outlined and consistently implemented. Strong governance processes enable key stakeholders to reach a common understanding of objectives and responsibilities. In this edition of VantagePoint, we outline the following five key investment pitfalls that can steer investors off course and offer guidance on how to avoid them:

  1. Taking too little risk
  2. Firing excellent managers after a bout of underperformance
  3. Sizing individual positions too large
  4. Misunderstanding liquidity risk
  5. Failing to exercise strong governance

 

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