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Quiet Compounding
A takeaway here is that few things matter more with money than understanding your own time horizon and not being persuaded by the actions and behaviors of people playing different games than you are.
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
But if that cash prevents you from having to sell your stocks during a bear market, the actual return you earned on that cash is not 1% a year—it could be many multiples of that, because preventing one desperate, ill-timed stock sale can do more for your lifetime returns than picking dozens of big-time winners. Compounding doesn’t rely on earning b
... See moreMorgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
Most financial advice is about today. What should you do right now, and what stocks look like good buys today? But most of the time today is not that important. Over the course of your lifetime as an investor the decisions that you make today or tomorrow or next week will not matter nearly as much as what you do during the small number of days—like... See more
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
But investing is not a hard science. It’s a massive group of people making imperfect decisions with limited information about things that will have a massive impact on their wellbeing, which can make even smart people nervous, greedy and paranoid.
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
A good rule of thumb is that any investment choice that feels good is a bad one, and anything that seems scary or boring is often a good one.