Forum Topics Investing Wisdom - Visualised
Lewis
Added 3 months ago

I find there are a lot of long-term investing ideas that make sense when I read them, but investing timelines are so long that it feels different when I run into these scenarios in practice. These ideas and lessons gloss over decades in a single paragraph or sentence. Sitting there and watching a portfolio move daily has a very different feel to it.

I've found that seeing these ideas visualised somehow speaks to a different corner of my brain and I've saved these screen shots in a folder on my phone after they've given me lightbulb moments over the years. I come back to this folder anytime things get choppy and I need to reset my perspective. I find it useful to re-affirm the basics, hopefully others do also. I never imagined I'd share them so I can't attribute their origins or validate them, useful to illustrate board stroke concepts nonetheless.


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Strawman
Added 3 months ago

Adding this @Lewis

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lyndonator
Added 3 months ago

Related, a very nerdy video review of an academic paper on being 100% invested in stocks (even in retirement), as opposed to a 60/40 stocks/bonds portfolio or a target date fund.

https://youtu.be/-nPon8Ad_Ug?si=C72Dd_ZTxaSACi18

It is very dry, but is almost worth wading through for 2 pithy quips towards the end.

I'll only say, beware of your bias here, as I suspect this is very much preaching to the already converted


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Rick
Added 3 months ago

Spot on @Strawman!

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Solvetheriddle
Added 3 months ago

@Lewis , yes, all makes sense; however, I suspect it is a large leap of faith for new investors who haven't seen it play out in their own experiences. one big issue is that there is a large element of randomness in investing, outcomes that blur the picture, eg outrageous risk takers and "know nothings" stumbling into large returns, investing is not a neat scientific process where rational actions and discipline always win, especially over the ST/MT. it is the realisation and acceptance that occurs (try not to panic, lose focus or get angry about it) and blocking out unhelpful noise and chatter (there is a lot of that lol) that helps me. use whatever works

19
Stumpy
Added 3 months ago

Too right. To me it feels like the more you can suppress natural human instincts (going with the crowd, panic when you lose, elation when you win, immediate satisfaction, recency bias etc), the better an investor you become.

I find myself switching semi-regularly from good rational mindset investor to irrational human nature investor, which is why I really value regular reminders from threads like this.

I also find I get back on track after re-reading the classic investing books which talk about process and patience, and even books like Thinking Fast and Slow to remind me how fallible our puny brains can be.

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