Barry Ritholtz, columnist and founder of Ritholtz Wealth Management, offers insights on the “problems and investing risks of forecasting” in a recent Bloomberg View.

He explains that, because people dislike uncertainty so much, they tend to believe in predictions to create an “illusion of control and stability, where often there is none. Order is created out of chaos; it is a comforting illusion.”

For investors, Ritholtz points out that “one of the biggest risks is the unfortunate tendency to stay wedded to predictions.” He uses the example of a bullish or bearish investor who, instead of admitting an error when the market goes against them, doubles down to avoid humiliation or loss of credibility. “This fear,” writes Ritholtz, “has caused legions of investors to miss big gains or to sell at the lows after a crash.”

Ritholtz suggests measures such as a stop-loss rule—”where one must admit a trade isn’t working out, and then unwind it”–to avoid such a scenario. “The sooner we understand what is and isn’t knowable, the better off we—and our portfolios—will be.”