18th October 2018
Plain English Finance: Keep Calm and Carry On?
Many people have got in touch with me in the last couple of weeks to ask if I think it is time to sell out of “riskier” assets and funds given the “risk of a massive crash”. Given this fact, I thought that I would take some time to write a quick email on the subject.
A couple of years ago I wrote an article where I said:
“People who have taken no time to study it or really understand it, think that the stock market is horribly risky. This is perhaps unsurprising given that the media goes bananas every time there is a ‘massive crash’ and that is most people’s ‘reality’ when it comes to investment. The 99% of the time that a sensible, diversified portfolio will gradually and entirely effectively build your wealth doesn’t make front page news…"
Human beings are hard-wired psychologically to focus on the extraordinary to the exclusion of the unremarkable. Journalists are particularly prone to this phenomenon given that this is what sells copy (precisely because we are all hard-wired this way). Given this subject matter, I find it amusingly coincidental that the book I most recently finished reading is the brilliant and utterly fascinating “Stumbling on Happiness” by Harvard Professor of Psychology, Daniel Gilbert.
By Andrew Craig
Investments, Andrew Craig, Plain English Finance, Investment Commentary
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