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It's all pretty straight forward math, but the problem is that people are not rational. I think it's really a personality trait that you can emotionally distant
by koonsolo 7y ago
It's all pretty straight forward math, but the problem is that people are not rational. I think it's really a personality trait that you can emotionally distantiate yourself from the numbers.
On the buying side, you could spread out the buying over several chucks to "spread the risk", but again numbers show that the optimal strategy is to buy in 1 go, right now.
- WalterBright 7y ago> I think it's really a personality trait that you can emotionally distantiate yourself from the numbers. It's a conscious decision. What I do is think "what would my strategy be if I was investing Monopoly money". When there's a large divergence with what I do with real money, I then try to reconcile the two. The more you can deal with your cognitive biases (such as the sunk cost fallacy) the better your investment decisions will be. Again, this is a conscious choice. You're not a slave to your emotions - that's what makes people different from animals.