Most investors are making the same costly mistake — and it has nothing to do with picking the wrong stocks
Studies showing younger investors believe gambling is a reasonable path to wealth creation, and not all that different from investing, “concerns me deeply,” Liz Ann Sonders said.
Liz Ann Sonders, Charles Schwab's chief investment strategist, has noticed retail investors are making a costly error. She suggests a lack of traditional disciplines and not rebalancing portfolios are key issues. Investors are also overly reliant on trading rather than following a plan and are using leveraged ETFs without understanding the risks.
The market shows a blurring of investing and gambling, with younger investors mistaking gambling for investing. Sonders advises against reacting to market drops, as the context of the investor matters more than a generic market advice. While valuations look reasonable now, she warns against getting too excited about AI's potential profits.
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