So they ignore basic investment principles and proper portfolio development. They forget everything they've ever heard about risk. And they reject the notion that past performance is no indication of future results. Consequently, people ask their financial advisor for the ticker symbols of their mutual funds, so they can download the positions daily on their home computers. They begin to move their money into wildly speculative positions such as Internet funds.
Some people even begin day trading.
You can't imagine why anybody would want to. One person recently told me that he has an inheritance worth more than his entire current portfolio. Rather than putting this new money into a diversified portfolio as he has done so far, he wants to put the entire inheritance into technology stocks. In the meantime, he's cashing out his portfolio so he can pay his bills. It didn't matter to her that her fund had half the risk of the stock market.