The Seduction of Pessimism

Pessimism is intellectually seductive in a way optimism only wishes it could be. Tell someone that everything will be great and they’re likely to either shrug you off or offer a skeptical eye. Tell someone they’re in danger and you have their undivided attention. Hearing that the world is going to hell is more interesting than forecasting that things will gradually get better over time, even if the latter is accurate for most people most of the time. Pessimism can be hard to distinguish from critical thinking and is often taken more seriously than optimism, which can be hard to distinguish from salesmanship and aloofness. Y2K got more media attention than any individual tech company. SARS go

The damaging behaviour investors

We have met our enemy and he is us. The average Canadian investor has lagged the average fund for the last 10 years. Through December 2016, the average Canadian diversified equity fund returned 4.37%, yet the average diversified equity fund investor earned 2.99% over the decade--a 1.38% gap. This gap is costly: In dollar terms, the difference between the two numbers equates to nearly $20,000 in lost gains on a $100,000 investment. When all fund categories are considered, the average Canadian fund gained 4% over the decade, versus 3.31% for the average fund investor. This disparity was the largest among the seven major fund markets studied in Morningstar's forthcoming white paper titled Mind

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