Take Responsibility for Your Stock Losses

Editor's note: This is the continuation of a special collection of previously published investing lessons from RealMoney contributor and market strategist Barry Ritholtz.

"He who blames others has a long way to go on his journey. He who blames himself is halfway there. He who blames no one has arrived."

-- Chinese proverb

In the first installment of "The Apprenticed Investor," we discussed why investors should expect to be wrong, and most importantly, having appropriate plans for what to do when you are wrong.

That column gave you two lessons disguised as one. Hidden within was a second, subtler message. It is so obvious, yet so ignored by investors: You are ultimately the only person responsible for your investments.

Apprenticed Investor: Take Responsibility for Your Stock Losses

That sounds pretty straightforward, but for some reason it seems to be a problem in our society. Few want to take responsibility for their actions or situation, if they can avoid it.

Think I'm exaggerating? Every kid who does poorly in school gets diagnosed with ADHD. We are fat because of McDonald's (MCD). There are shootings because of TV violence.

In sum, it's easier to pass the buck than to admit the truth.

Bad Excuses for Poor Investments

At times, the excuse-making from investors is even worse. Over the years, I have heard every complaint imaginable for why losses occur. Inevitably, these gripes go something like this: "It's not my fault but the fault of:

The analyst who recommended it.

The banker who did the deal.

CNBC, which hyped it.

The talking head who loved it.

My brother-in-law, who got a hot tip on it.

"

I've heard people complain about their broker's bad advice, the lousy execution they got, and how a market maker or specialist hurt their trade. Other kvetches? Management stinks, insiders are dumping shares, regulators are overzealous. Margin calls did it. Or was it the president's policies or congressional gridlock or Chinese imports? Really, who can trade when the economic data are cooked, and the "Plunge Protection Team" counters your best positioning?