Take the Words of a CEO with a Grain of Salt Change Your Contributions After a Raise

Chance in Investing

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Most people tend to underestimate the role of chance in events and thus will erroneously attribute their skill as the defining factor for achieving success. And why not, this feels good. Its easy for us to accept the accolades that come with success, but extremely difficult to accept the blame that comes with failure. It's usually "some else's fault." This overconfidence was clearly illustrated in the late 1990's where even novice investors experienced exceptional growth in technology stocks. As technology stocks continued to soar, investors began to attribute much of their success to their ability to make wise investment decisions. Instead, they were making horrible choices, forgetting that valuations matter and things are never "different this time." How do you avoid this? Study history! Bubbles also occurred with the railroads in the early 1900's, radio broadcasting in the 1920's, and oil and gold stocks in the early 1980's. In every case, investors thought, "This time is different, it's a new economy."
Source: http://www.investorguide.com/igu-article-1051-stock-strategies-investing-driving-you-crazy-maybe-its-because-you-already-are-part-3.html