Good investing: Protect yourself from FOMO

Good investing: Protect yourself from FOMO

Most good investing is about keeping your investment for the longest time possible. If you want to buy an investment just because its price went up, you probably don't know why it went up and will sell when it goes down.

Refrain from the need to own whatever goes up the most. Someone will always be richer than you, and that is okay.

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Five Investing Powers 路 Collaborative Fund

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Two truths:

  1. Every asset goes through temporary out-of-favour periods.
  2. The world continues to change, and some things will fall permanently out of favour. Investing strategies that have worked for decades will stop. Industries will go through typical cycles, then they die.

While patience is vital in investing, you should not use it blindly in every situation. While some behaviours never change, the composition of the economy does.

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A rare skill is to align your peak-wealth years with a generational collapse in interest rates, the Fed becoming comfortable with quantitative easing, and falling marginal tax rates.

Also, the ability to understand the historical context of what it was like in other times will help you appreciate what's possible.

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Investors on the same field often play different games. Even investors who think they're playing the same say have widely different goals and risk tolerances.

Most investing debates reflect investors playing different games and missing each other in conversation. Investing power is knowing what game you're playing without being swayed by people playing different games.

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It is therefore essential not to mind when your investments hurt you at times.

  • Losing money can make you gloomy.
  • Your investment success may not have come solely from skill.
  • There will be doubt among your investors, co-workers, spouse, friends, and self during underperformance.
  • Realising all the risks you never considered can make you miserable.

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Bad Stuff Can Happen To You

The risk of unpleasant things happening is always there for everyone, and though it seems that job loss, divorce, financial fraud etc. only happens to other people, no one is exempt from these things, given enough time.

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Personal Finance Philosophies 路 Collaborative Fund

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The Lessons Of History

History is a treasure-house of learning, and as many books teaching us lessons from history point out, what was true in the medieval ages is often true even now, though the circumstances, technology and society have gone through a sea of changes.

The things that are worth knowing are those which hold steady and true then and now.

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Same As It Ever Was 路 Collaborative Fund

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Common Causes Of Bad Decisions: Social Pressure
  1. People push their moral boundaries due to incentives and rewards.
  2. No one wants to be kicked out of a tribe or community so they play along.
  3. People do not think through the consequences.
  4. Little things and tiny, overlooked details snowball into something big.
  5. Other people's errors are easier to spot than one鈥檚 owns, leading to blind spots and denial of one鈥檚 faults.

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Common Causes of Very Bad Decisions 路 Collaborative Fund

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