There is nothing pleasant about a bear market—not the anxieties they cause, not the paper losses, not the relentless drip, drip, drip of reports in the media about this or that daily downturn. The gut instinct is to stem the losses by selling before the market goes down further, but locking in losses after the fact has, historically, almost always been the wrong move.
The “money illusion” refers to how we view our buying power today versus in the future. Are you falling victim to this potentially dangerous ideology?
. . . a need for precision sometimes can be paralyzing. We want the perfect outcomes so badly that we make no decision out of fear of making the wrong one . . . The question to ask yourself is, “Would you prefer the opportunity to be precisely right or the opportunity to avoid being precisely wrong?” Read more . . .