JMF Capstone Wealth ManagementAvoid The Recency Pitfall – JMF Capstone Wealth Management https://www.jmfcapstone.com An Alabama registered investment advisor Fri, 21 Nov 2025 19:30:19 +0000 en-US hourly 1 https://wordpress.org/?v=5.1.22 Avoid The Recency Pitfall https://www.jmfcapstone.com/2015/06/08/avoid-the-recency-pitfall/ https://www.jmfcapstone.com/2015/06/08/avoid-the-recency-pitfall/#respond Mon, 08 Jun 2015 09:00:38 +0000 http://evolvemypractice.com/?p=1971 Last year, U.S. real estate investment trusts (REITs) were the best-performing equity asset class. In addition, U.S. stocks far outperformed international stocks. Unfortunately, historical evidence demonstrates that individual investors tend to be performance chasers. They watch the markets, then buy yesterday’s winners (after the great performance) and sell yesterday’s losers (after the loss has already...

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]]> Last year, U.S. real estate investment trusts (REITs) were the best-performing equity asset class. In addition, U.S. stocks far outperformed international stocks. Unfortunately, historical evidence demonstrates that individual investors tend to be performance chasers. They watch the markets, then buy yesterday’s winners (after the great performance) and sell yesterday’s losers (after the loss has already been incurred).

Thus, I wasn’t surprised at the amount of time I spent in 2014, and in early 2015, trying to convince investors to avoid the mistake I refer to as “recency.” Recency is the tendency to extrapolate recent returns far into the future, which causes investors to buy high and sell low. That’s not exactly a recipe for investment success.

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