The most common — and destructive — lies investors tell themselves

We all lie to ourselves a little. What’s more, studies have shown that a certain amount of self-deception actually helps us to achieve success.  One famous psychological study even found that people who see the world for what it truly is tend to be clinically depressed. Nonetheless, when it is money on the line, it may be worth risking the shoals of depression in order reach the island of unbiased perspective.

In some of the cases below, you’ll be unfamiliar with the identified lie. In other cases, you’ll recognize the lie as one suffered by someone you know and you’ll have a chuckle. Other cases may make you angry. You may ask who I think I am to suggest that you might be engaging in the identified lie. These are the ones that, unfortunately, you need to look at little harder.

If after reading this, you conclude — as I hope some people will — that you have been engaging in one or more of these self lies, you will also realize, almost certainly, that to tell yourself the truth would be hard, or that it would require admitting past mistakes, or that it would require you to take actions that would be in some way unpleasant. I know this because we all have our reasons when we choose to lie to ourselves. Take heart. Nothing has to change overnight. What matters is that you acknowledge the truth, make a plan to fix whatever needs fixing, and follow through.

And if it’s hard, well… you’re tough. You’ll get through it.

Julian Close

Julian Close

Julian Close became a stockbroker in 1995. In his 20 years of market experience, he has seen all market conditions and written about every aspect of investing. Julian has also written extensively on corporate best practices and even written reports for the United Nations. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.

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