Founder's Insights E26: The Investor Psychology Trap

"Buy when there's blood in the streets. Be greedy when others are fearful."

We’ve all heard these sayings, but living through a full market cycle proves just how tough they are to follow.

Take Peter Lynch’s Magellan Fund as an example. Despite delivering legendary 28% annual returns from 1977 to 1990, the average investor in the fund actually lost money. Why? Because they chased performance, jumping in when returns were soaring and pulling out when markets dipped.

The same pattern plays out in real estate, stocks, and crypto. When markets boom, everyone wants in. When prices drop, fear takes over, and people sit on the sidelines or sell at a loss. Wealth is built by those who stay consistent, investing through all phases of the cycle, not just when it feels good.

We do not know exactly where we are in the cycle today, but one thing is certain. When pessimism is high, opportunities are everywhere.

Learn more about Lone Star Capital at www.lscre.com

Apply to attend the LSC Summit 2025: www.lscsummit.com

Get a FREE copy of the Passive Investor Guide:
https://www.lscre.com/content/passive-investor-guide

Subscribe to our newsletter and receive our FREE underwriting model package:
https://www.lscre.com/resource/fof-underwriting-toolkit

Follow Rob Beardsley:
https://www.linkedin.com/in/rob-beardsley/

Read Rob’s articles:
https://www.lscre.com/blog