The markets give, but investors often don’t receive. It is one of the greatest financial puzzles: Most years, the stock and bond markets generate impressive results, and yet many investors are left bewildered when it comes to their portfolios’ performance. Some blame lies partly with taxes and even more with investment costs.

The biggest culprit, however, is often staring at us directly in the mirror. We are often times our own worst enemy, frequently buying and selling stocks and bonds at just the wrong time. Investors make all kinds of mistakes – but possibly our biggest error is assuming the future will look like the immediate past. There is evidence that suggests that individuals tend to make predictions of the markets based on past returns. And there is further evidence that when individual investors become bullish, the market that follows tends to be bearish. People aren’t always getting out at the bottom and getting in at the top, but, they are pretty close.

As the markets climb, not only do we assume they will keep on climbing, but also our confidence grows and we make riskier investment bets. Soon enough, we are rolling the dice on hot stocks and narrowly focused sector mutual funds. Overconfidence can also play a role in market declines. Instead of accepting that short-term performance is unpredictable, we turn into amateur market strategists. Some of us sit tight, refusing to sell at a loss. And still others bail out, convinced that further losses lie ahead. And that, invariably, is when the markets start to rally. All this raises an obvious question: What can we do to capture more of the markets’ gains?

Most successful investors consistently apply an investment discipline. Our investment strategy is based on decisions from a disciplined investment process. Whether you are interested in learning more about our model or not, a strategy based on analysis, not the swings in market psychology, that you can stick with in good times and bad, is important to investment success.

America is breeding an infinitely renewable supply of naïve customers that will forever be chasing the herd, giving away billions in unnecessary fees and commissions and buying high and selling low. Don’t follow the crowd - Leave your investment strategy to us.

Odyssey Equity returns are calculated on a Total Return Basis and are presented net of all fees. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance changes over time and currently may be lower or higher than the performance data quoted above.

Mark Collard authored the above article.

Mark Collard is a Partner in the investment management firm, Odyssey Advisors, LLC. Collard received a BS in Business Finance and Accounting, Cum Laude from Saint Vincent College and an Executive MBA from the State University of New York at Buffalo.