Investors tend to fall into common traps that can undercut performance, including the "familiarity bias," "gambler's fallacy" and "endowment effect," writes James Cahn. He offers a simple solution. "One of the easiest ways to work around your individual biases is to work with a knowledgeable advisor. He or she will admit that no one out there knows the future, and remind you that the best way long-term investors can overcome irrationality is through a disciplined investment process and a rational outlook," he writes.

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