Following tips instead of plans
The mistake
A WhatsApp group, an influencer, a cousin with a "sure thing". If you cannot explain why you own something and when you would sell it, you don't own an investment — you own a rumor.
How to recognise it in yourself
- Your last three decisions came from someone else's recommendation rather than from your own written plan.
- You cannot explain, in one sentence, why you own what you own.
- The tip arrived with urgency attached — a window that closes, a price about to move.
What it costs if you leave it
A tip gives you an entry point and nothing else. It does not tell you how much to buy, when to sell, what would prove it wrong, or how it fits with everything else you own — so when the position moves, in either direction, you have no basis for the next decision except another tip. Portfolios built this way accumulate positions nobody can justify, and they are almost always the ones sold at the worst moment.
The fix
Before buying anything on a tip, write one sentence explaining why you're buying it and one sentence for what would make you sell. If you can't fill in both blanks, it isn't ready to be a real position yet.
A concrete example
Two people buy the same stock after a tip: one bought it because a group chat said "it's about to explode," the other because they researched the company's fundamentals and have a specific price and timeline in mind. When the price drops 20%, only the second person can tell whether that changes anything.