[打卡]阅读打卡第19天 - The Psychology of Money

Progress: 207

• View volatility and uncertainty of the market as a fee rather than a fine: it's an "admission fee to get returns greater than low-fee parks" (e.g. cash & bonds) --> comparing experiences of entering Disneyland vs. community parks vs. staying free at home
• Fees = dealing with your fears, uncertainty, doubts, and regret --> stay put, aim for the long run instead of short term trade ins & outs
  
• “Understand your own time horizon and not being persuaded by the actions and behaviours of people playing different games than you are” —> you may see people spending money, but oblivious of their goals and aspirations —> do not get influenced by others who are playing different games than you are, (e.g. you wear scrubs at work, no need to spend on office lady attire), "go out of your way to identify what game you are playing”
• Mission statement: “I am a passive investor optimistic in the world’s ability to generate real economic growth and I’m confident that over the next 30 years that growth will accrue to my investments”
• problems resolve and people adapt. Markets also adapt. Stay optimistic for the long run.
• Pessimism garners attention because we are more acutely aware of quick setbacks than slow progresses in the long run --> "in investing you must identify the price of success -- volatility and loss amid the long backdrop of growth -- and be willing to pay it"
• Be aware that we all tend to search for evidences that validate our beliefs / opinions --> the more you believe something is true, the higher the risk of overestimating the odds of it being true
• Our interpretation of the world is based on what we know and our past experiences, what we don't know, we fill in the gaps --> e.g. a 1 year old girl knows little about the world, but has a clear explanation of how everything runs --> every one of us is the 1 year old girl ==> the higher the stake, the safer it is to have a wider margin of error