Why the more you learn about investing, the worse you might actually perform (The "Mount Stupid" Trap)
I was researching the Dunning-Kruger effect in finance and found a study of 66,000 brokerage accounts showing that the most active traders underperformed the market by 6.5% annually.
It turns out there's a specific psychological peak called "Mount Stupid" where our confidence is at its highest, but our actual competence is still very low. This is usually when we start making the most expensive mistakes.
I made a short visual explainer on how to "pre-mortem" your trades and use a prediction journal to stop your ego from tanking your returns. Curious to hearhas anyone else noticed their returns dropped once they started "trying harder"?
u/arcticfox842 — 11 days ago