Last Wednesday, one of my client’s accounts closed with the value of exactly $1,111,111.11. What an extraordinary thing, all 1’s right to the penny. What does it mean? Does it have some significance? Obviously not. It’s just a coincidence that the account hit that exact number.
We recognize that coincidence for what it is. A chance number. Yet what about another coincidence? “I picked 3 stocks in a row that all went up 5% in the first week. I must be a genius! All my stocks go up that much the first week! So I’ll just buy, buy, buy and get rich.” Or how about, “XZY Corp. always goes up after a 3 day correction of at least 2%. So I can buy it with confidence knowing that pattern will hold true.”
Those last two are as much coincidence as an account value having all 1’s on a particular day. If you are investing your hard earned money, make sure you’re doing it for the right reasons. Not because random chance made it look like there was some kind of pattern you could use to invest.