Behavior Analytics vs. Asset Analytics

Spending time on analyzing assets is common. We consume financial news, listen to tips from seasoned experts, read charts and analyze if the company we plan to invest in has a bright future. However, if the asset performs well or not is an external factor. You can’t control the company’s future nor can you control the market’s performance. But you can control and optimize your decisions. Especially decision making patterns which are not a single event, but habits.

What’s the critical thing about patterns? You need to know which apply to you, and which of them directly lead to underperformance. Without awareness, you can’t improve.

For example: consider that you decided to sell a stock which had good performance, but you thought was running out of steam. You were reading financial news on a regular basis and heard about an undervalued stock which was expected to rise in value soon. Reallocating money to this stock is what you did. Not just once, but multiple times during the next months. A decision pattern has formed. The critical question is if this behavior was smart. How did the stocks you sold perform during the next months? How did the ones you bought instead do? You need to know what the actual outcome is.

An often forgotten factor in decision making is psychology. You might have analyzed all the stocks perfectly. Still, there is a good chance that psychology tricks you into behavior which endangers good performance. The examples presented above include a reference to the well-known Disposition Effect. Investors tend to sell well-performing stocks too soon, as they feel more comfortable with taking profits. But stocks that rise have a tendency to continue doing so. It is quite likely that the sold stocks in this example would have netted a gain of 20% during the next 12 months, while the bought ones only netted a plus of 3%. You could have increased your performance by holding onto winning stocks. The mentioned pattern is just one out of many common pitfalls.

The essential part of making better decisions is to evaluate if you do have consistent patterns in your behavior, and how this translates into performance. tritra brings convenience to this process. You can make predictions and create strategies, review them in the journal and check if you score well. This process is supported by algorithms which provide you with insights. The math is done automatically, so you can focus on doing the fun stuff. We invite you to discover and improve your skills.

It is our mission to enable you to make better investment decisions.