The main challenges to investing success are
clear self-motivation, goal-setting, and consistent execution.
Conversely, what are some of the reasons why people fail at investing after setting such goals?
Discrepancy
As you engage in various investment activities on your own, one of the most important reasons why you fail is "discrepancy".
After watching the downfall of SVB and CS Bank, I think that the inconsistency of their strategies was one of the main factors.
Mismatched bond maturities; mismatched creditor and service provider motivations.
In theory, bonds should be immune to interest rate hikes because of their maturity. However, due to various institutional covenants, maturity mismatches can lead to unexpected defaults when environmental changes occur that crucially affect business continuity.
(Leveraged investment -> interest rate hike -> nominal bond price decline -> asset valuation decline -> equity ratio decline -> business performance deterioration -> investor exodus -> default?)
(Perhaps the Fed, which decided to raise rates in these cases, fully foresaw the economic entities that would fall into such a situation, but remained hawkish in the face of sharp rate hikes in order to achieve some other utility (e.g., deflating bubbles rather than stabilizing prices)...)
In terms of personal investments, I'd say investment failures due to mismatch between return on capital and utility of capital (sufficient return on capital but not enough to meet strategic quantitative target return), excessive use of leverage, etc...
While accurate and reasonable (reasonable and logical for the investment target) capital return targets, sufficient capital and investment horizon, and continuous execution and monitoring are essential to achieve the targeted quantitative return (quantitative amount) (-->most institutional investors execute the above factors after careful pre-planning), it seems that individual investors make investments that are difficult to keep even the principal amount (due to one or two failures, even if supported by a few big successes) due to arbitrary target setting, insufficient capital, and inconsistent investment activities.
Next, let's think about the example of Distraction.