Cake
Thomas, Duke of Norfolk. Image courtesy Wikipedia.
The likelihood you’re a bad investor is based entirely on how well you understand the tradeoff between risk and return. “You can’t have your cake and eat it too,” says the idiom first attributed to Thomas, Duke of Norfolk in the 16th century.
If you want the potential for a return greater than the risk-free rate, you must be willing to accept risk in all its many forms. And if you think you can earn a return greater than the risk-free rate without accepting risk, you’re a bad investor.
The hallmark of all bad investors is their denial—or, to be kind, their misunderstanding—of that simple tradeoff. And every one of their poor investment decisions stems from it.