Don’t let the "break-even fallacy” and human psychology sabotage your investment returns!

Описание: Today we look at two reasons why avoiding making a large loss as you invest throughout your life is actually quite a lot more important – big picture - than many people realise overall.

First - The crucial role played by human psychology.
Secondly - Something called “the break-even fallacy”.

The way our brains work increases the likelihood that we will buy high and sell low. Financial products are one of the few things that people tend to buy when they’re expensive and sell when they’re cheap – for reasons of deep-seated human psychology.

It is for this reason that most people’s investment returns are generally a long way lower than the returns of the stock market as a whole, which can be disastrous for your ability to build wealth. Today we look at this idea in a bit more detail and at what you might do about it.

We also look at “the break-even fallacy” which all too few people understand. This is just about how the maths works at the most fundamental level when it comes to calculating percentage returns.

Big crashes and volatility in stock markets need not matter if you have a plan, invest for the very long run, invest regularly each month and avoid panicking through market crashes – as we have covered in detail in the last few weeks and months in this video series.

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My best-selling book on Amazon: "How to Own the World"
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My new book: "Our Future is Biotech"
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INVESTMENT ACCOUNT PROVIDERS
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Capital at risk.

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MoneyWeek Magazine
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Bullion Vault
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PLEASE NOTE - for more information on these companies and other key resources, please do check out this page of our website: https://plainenglishfinance.co.uk/opi...

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IMPORTANT DISCLAIMERS
Please note: Some of the links on this page are affiliate-links. This means that if you use them we will be paid a small commission by the relevant company. To be clear – there will be no additional charge for you if you do this.

Your capital is at risk when you invest. The value of investments and any income from them may fall as well as rise, the return may increase or decrease as a result of currency fluctuations, and you may not get back the amount of your original investment.

Plain English Finance Limited does not make any recommendations regarding the suitability of any product for you and the information provided here should not be considered as investment or other advice or a recommendation to buy, sell or hold a particular investment.

Whilst Plain English Finance Limited has used all reasonable efforts to ensure the accuracy of the information contained in this video at the time of publication (November 2023), no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein.

Certain economic and market information contained herein has been obtained from sources prepared by other parties. While such sources are believed to be reliable, neither Plain English Finance Limited nor any of its directors or advisers assumes any responsibility for the accuracy or completeness of such information.

Please note: Past performance is not a reliable indicator of future performance. The value of investments and any income from them may fall as well as rise, the return may increase or decrease as a result of currency fluctuations, and you may not get back the amount of your original investment.

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