The Big Investing Mistake Even the Smartest People Make, According to Money Psychology Expert

Core Insights - Investing is a significant industry where many individuals earn substantial income by providing financial advice, leading investors to believe they need expert guidance to manage their money effectively [1] Group 1: Investment Strategies - There are numerous theories and metrics in investing, but success does not necessarily depend on following complex strategies [3] - Simplifying the investment process can lead to better outcomes, as overcomplicating it may result in poorer performance [4] - Investing in an S&P 500 index fund and maintaining a long-term buy-and-hold strategy is often more effective than trying to time the market or pick individual stocks [5][6] Group 2: Performance of Active vs. Passive Management - According to Morningstar, less than 50% of active fund managers outperformed the market index in 2024, and only 7% of large-cap equity funds surpassed their passive counterparts over the past decade [5] - The focus should be on sustaining average market returns over an extended period rather than seeking the highest possible returns [7]