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Here’s the uncomfortable research finding: the average investor earns meaningfully less than the average investment, and the gap is caused by behavior. People buy when markets are euphoric and expensive, panic-sell when markets crash and everything is on sale, and chase whatever performed best last year. Every one of those instincts feels right in the moment and destroys returns over time.
Market drops are not a malfunction; they are the price of admission. Historically the US market has fallen 10 percent or more every couple of years on average and 30 to 50 percent a few times per generation, and long-term investors who simply held were rewarded each time. The investors who got hurt worst were usually those who sold at the bottom and locked in losses. You cannot avoid crashes; you can only decide, in advance, how you’ll behave during them.
So build a system stronger than your emotions: automate contributions so investing continues through every headline; write a one-page plan stating what you own and why, and read it before making any change; check your portfolio rarely, quarterly is plenty; and treat anything promising fast, guaranteed riches, including most hot tips and many crypto pitches, as the red flag it is. In investing, the discipline is the strategy.