My theme for 2011 is how to be abnormal, which is a new geeky independence that ignores the markets. Stop following the crowd and tend to your portfolio and life goals. Ignore what’s being bloviated on the business channels.
In order to understand abnormal behavior, which in my definition will make you more successful, you first need to identify “normal” behavior.
In the eyes of a behavioral economist like Prof. Meir Statman, author of “What Investors Really Want“ it means we place a premium on winning and special knowledge of the markets, something that rarely happens to average investors.
“We want to beat Wall Street through active investing,” Statman says, “but Wall Street is more likely to beat us.”
It’s far-too-normal behavior to pick stocks, real estate or exotic investments that we think could be winners or pick funds that have run up good returns last year. Yet research shows that we have no idea what we’re doing and get needlessly burned. If you want to improve your returns, be abnormal, turn off your inner Cramer and heed the following: