I’ve posted Entry #41 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Emotions Trump Numbers.
Juicy Excerpt: The move in recent decades to research-based investment strategies has made investing decisions moreemotional. Lots of us were going with Get Rich Quick choices in the days when we were going with our gut. But now we are going with Get RIch Quick choices that we tell ourselves are backed by the numbers. The phony numbers encourage us to stick with dangerous choices longer than we would if we were not able to kid ourselves into believing that the choices are rooted in science.
Hope lies not in lecturing people to pay attention to the numbers. That doesn’t work when trying to persuade people to eat better and it won’t work when trying to persuade people to invest better either. Emotions trump numbers every time.
What I think might work is developing tools that help make the benefits of following realistic investing strategies tangible.