I have been having a recent email exchange with a Unovestor. I was persuading him to consider more reasonable returns from his investments. His comments:
“If I cannot expect even 15 to 18% returns from equity or mutual funds then what is the point of investing in them.
Even real estate investment held over long periods of time can give 15% returns.”
Now, there are certain issues with this line of thinking.
The behavioural experts have defined a good list of cognitive biases that influence our thought process and this argument was no exception.
In this particular case, there are 2 clear biases that stand out. There is yet another one, that I add. … [Continue Reading]