5 ms·

It's also compounded because our Peer groups are doing it too so there's that additional FOMO. I get the same feelings as you do (we all do). I read that if th

It's also compounded because our Peer groups are doing it too so there's that additional FOMO. I get the same feelings as you do (we all do). I read that if the price goes up, we get an elated feeling but it's minor. But when we lose money, that negative feeling is twice as strong.

aaaxyz 6y ago
There's also the fact that the more often you look at your portfolio, the less likely you are to see it go up (assuming typical returns and volatility). Something like ~51% if you look at it every hour vs ~70% if you look every month. Taleb uses that example in Fooled by Randomness.
rubicon33 6y ago
People seem to have a strange way of 'investing'. For me, it falls into 2 categories: 1) Long term investements which I almost never look at. Regular scheduled deposits going into an index fund. 2) Bets. Fun little side gambles which I always do for one purpose - aquiring something in the real world. Example: I want a new M1 macbook, but rather than drop $1k, I gamble $3k bitcoin. If it makes enough profit for the macbook, I sell immediately, and buy. If it drops, I just hang onto it until it goes up. But ultimately, this category of investment is never anything other than a bet, which I am OK losing. And, it's always a means to and end. I have a product in mind, and I justify gambling some money (which is fun) as a means to acquiring said product.
- alsetmusic 6y ago
  > which I am OK losing. This is the most important concept of investing. You should never place an amount you wouldn’t be ok losing. If losing every cent of an investment could cause financial ruin, you’re investing too much.
  - ajfjrbfbf 6y ago
    I would agree with you if you replaced every "investing" word with "speculating" or "gambling". Otherwise what else am I suppose to do with my money but invest it? Leave it in the bank so they can profit off of it? There are entire categories of equity with variable degrees of risk, and a lot of them won't make me "lose every cent" in any situation but the end of the world.
  - djrobstep 6y ago
    But there is a risk in not taking risk too. If you had taken this advice over the last ten years (my grandmother did, for instance) you’d have missed the greatest decade in stocks and property for many years, and are much poorer because of it.
  - i5heu 6y ago
    You can not not invest „money“. If you let the „money“ exists in Fiat money form your money is invested in this exact fiat money. This is all a big gamble with different risks. But generally: if you have “money” you have a risk to lose it. I use here ““Money”” as a synonym for buying power, or value that can be exchanged. So it is not like Money because it dose not describe the meta value and is part of the big gamble ;)
  - prox 6y ago
    I had an economics teacher who very interesting and he taught us exactly this. He also actually owned a shop, so every economic theory he could explain with a real world example.
  - whobar 6y ago
    You are erroneously conflating investing with gambling. Astute investing in index funds is essentially risk-free if your retirement is far enough away. As you get closer to retirement, you should start moving from funds to bonds (or cash if you want to be extra safe), so you are protected in the case of a crash. I am not OK with losing the money I have invested, but it is so unlikely that I do not need to worry about it. A situation where the global stock market crashes, and never recovers, is basically an apocalypse. That is not worth planning for.

aaaxyz 6y ago

There's also the fact that the more often you look at your portfolio, the less likely you are to see it go up (assuming typical returns and volatility). Something like ~51% if you look at it every hour vs ~70% if you look every month. Taleb uses that example in Fooled by Randomness.

rubicon33 6y ago

People seem to have a strange way of 'investing'. For me, it falls into 2 categories: 1) Long term investements which I almost never look at. Regular scheduled deposits going into an index fund. 2) Bets. Fun little side gambles which I always do for one purpose - aquiring something in the real world. Example: I want a new M1 macbook, but rather than drop $1k, I gamble $3k bitcoin. If it makes enough profit for the macbook, I sell immediately, and buy. If it drops, I just hang onto it until it goes up. But ultimately, this category of investment is never anything other than a bet, which I am OK losing. And, it's always a means to and end. I have a product in mind, and I justify gambling some money (which is fun) as a means to acquiring said product.

alsetmusic 6y ago
> which I am OK losing. This is the most important concept of investing. You should never place an amount you wouldn’t be ok losing. If losing every cent of an investment could cause financial ruin, you’re investing too much.
- ajfjrbfbf 6y ago
  I would agree with you if you replaced every "investing" word with "speculating" or "gambling". Otherwise what else am I suppose to do with my money but invest it? Leave it in the bank so they can profit off of it? There are entire categories of equity with variable degrees of risk, and a lot of them won't make me "lose every cent" in any situation but the end of the world.
- djrobstep 6y ago
  But there is a risk in not taking risk too. If you had taken this advice over the last ten years (my grandmother did, for instance) you’d have missed the greatest decade in stocks and property for many years, and are much poorer because of it.
- i5heu 6y ago
  You can not not invest „money“. If you let the „money“ exists in Fiat money form your money is invested in this exact fiat money. This is all a big gamble with different risks. But generally: if you have “money” you have a risk to lose it. I use here ““Money”” as a synonym for buying power, or value that can be exchanged. So it is not like Money because it dose not describe the meta value and is part of the big gamble ;)
- prox 6y ago
  I had an economics teacher who very interesting and he taught us exactly this. He also actually owned a shop, so every economic theory he could explain with a real world example.
- whobar 6y ago
  You are erroneously conflating investing with gambling. Astute investing in index funds is essentially risk-free if your retirement is far enough away. As you get closer to retirement, you should start moving from funds to bonds (or cash if you want to be extra safe), so you are protected in the case of a crash. I am not OK with losing the money I have invested, but it is so unlikely that I do not need to worry about it. A situation where the global stock market crashes, and never recovers, is basically an apocalypse. That is not worth planning for.