In a recent Australian rugby league grand final, the star player in one team sent a police escort to his home to fetch a missing "lucky" red boot. The shoe arrived in the dressing room just in time for kick-off. The player's team ended up losing anyway. So do we blame the shoes?

Just like sports stars who attribute their success to lucky charms or pre-game rituals, many investors follow their own superstitions in the market — like never trading in January or avoiding stocks that start with the letter 'L' (for 'loser') or always following the advice of a particular newspaper columnist.

When these investors do well, they attribute their successes to their own skills and decision-making. Conversely, when their portfolios suffer, they tend to attribute blame to unknown or external factors beyond their control. Overlooked is the possibility that these various outcomes are just random.

Economists describe this tendency to claim all the credit for good things and disown the bad as "self-attribution bias". It's just one of a number of typical behavioural biases affecting investors covered by Dimensional's Scott Bosworth in a recent presentation; to see a pdf of the slides please click here.

Common and innate behavioural biases also include overconfidence (a tendency to believe we are better investors than everyone else) and hindsight bias (a tendency to see peaks and troughs as obvious, after the fact).

Other prevalent biases identified by researchers include familiarity (a tendency to invest in only what we know, thus giving ourselves a false sense of control), regret (a tendency to become overly conservative after a bad investment experience) and extrapolation (a tendency to assume the market will continue in its recent pattern).

As Scott explains, many of these biases, while helpful in some areas of life, can be destructive if we act upon them as investors. Overconfidence, for instance, can be a useful attribute for an entrepreneur. But investors who let their egos direct their decisions can do themselves immense harm.

The assumption behind the ego-centric approach is that investing is akin to speculation. Like poker machine addicts adamant that one machine pays out more than another, speculators want to believe that they have a lot more agency than they do and see themselves as doing battle with the market.

The practical outcome of allowing these behavioural biases to dictate our decisions is that we often fail to reap the benefit of good markets, or, in down markets, we make a bad situation worse: We buy high and sell low, we accumulate large tax liabilities and we end up with concentrated portfolios that expose us to unnecessary, stock and sector-specific risk.

It doesn't have to be this way. While our behavioural biases will always be with us and often are useful in our everyday lives, we can help ourselves by limiting their influence on our investment decisions and, instead, by paying attention to those things within our control — like diversification and discipline.

The fact is the stock market will always gyrate up and down. That is its nature. There will always be uncertainty. But we can comfort ourselves with the fact that the market is extremely efficient in pricing in news, certainly more efficient than even the smartest individual without inside information. And unlike the casino, the odds are with investors who don't succumb to behavioural biases.

So ironically, it is by letting go of our ego-driven impulses toward the market that we become able to reap the returns from disciplined long-term investment and minimise the damage that our behaviour can wreak on our portfolios.

"If you think of investing as speculating, you're equating it with gambling," Scott concludes. "Everyone knows the odds favour the house, not the gambler. With investing, you accept the ups and downs, knowing that the odds favour the investor."

So it's not like a football grand final where there is one winner and one loser. And you don't need a pair of lucky red shoes