Tag: behavioural finance

Jake · Apr 9, 2026 8:59 pm

Stock markets were stable to up today, trying to digest the news from the Middle East. It’s my opinion that we are facing many years of instability in the Middle East and elsewhere. The United States has failed to play to win again, even with Trump at the helm.

I don’t care about the politics, but the current reality on the ground shakes my fundamental belief in the US economy. What we see in the news is a lot of “micro” reporting, very little in the way of looking at the long game and how this is going to play out over the years to come.

I cannot imagine what the Taiwanese are thinking right now, how all this will play out for them vis-à-vis the Chinese. I don’t think it looks good. If one were to incorporate this kind of thinking into their investments, how would one adjust one’s portfolio to this “new reality”?

To find a defensive strategy here for someone in my position (74 years old and looking at not so many years to go), there aren’t a lot of good options. Stocks, perhaps. And then I add in my uncertainty around the US Estate Tax if I’m outside of Canada, and my investment options become even more restricted. There is always the option of simply putting my cash into short-term vehicles like treasury bills and treasury bonds. The Investment professionals seem to feel that it is folly.

Not that they offer any viable alternatives. What I do believe is that investors probably don’t rigorously try to determine what their financial needs will be in the future. If you save for retirement, should you not get to a point where you have a target rate of return? Do I need 10% compunded every year to live? This requires some thorough analysis and an honest look at how you can live given what you have got. It’s a simple spreadsheet that most can do with little effort. Analyzing what comes in versus what goes out. Building in a rate of return and your taxes, and voila! Be honest with yourself while looking at what you have versus what you need. Make your lifestyle fit your cash flow.

As I get older, I find I need less, want less and can easily spend less. I don’t have the energy or desire to travel. I don’t spend much as I don’t go out much. I’m too exhausted.

Get real. Have a reasonable plan and move forward.

close up shot of a yellow alarm clock on a purple surface
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#behavioural finance#investing#investing philosophy#investment philosophy#investment strategy#investments#portfolio strategy
Jake · Apr 8, 2026 7:34 am

Stock markets look to open very strongly today after the announcement of a ceasefire between the United States, Israel and Iran. It looks like it will be quite a positive day for the markets. In my opinion, nothing has been resolved with Iran, and it’s difficult to know where markets will go.

In terms of long-term strategy, my question is: what has all this accomplished, and is it just a break in the action? I don’t know. But I have several objectives to achieve that have been imposed on me as a result of my attempt to emigrate from Canada. None of which I have dealt with because of the stickiness of taking long-term decisions with what I believe to be incomplete information.

I continue to resist creating an investment policy statement to guide me through this. And I am suffering severe indecisiveness.

#behavioural finance#investing#investing philosophy#investment philosophy#investment strategy#investments#portfolio strategy
Jake · Apr 2, 2026 4:25 pm

Stock markets today were all over the place. I have been refraining from selling to raise cash to restructure my portfolio. It’s a little hard to time it perfectly. I should probably sell into the strong days, but I didn’t pull the trigger today. And a three-day weekend is a long time with what’s going on in the Middle East. Again, lack of strategy. I want to restructure, but I don’t have a plan. It’s always the same story: think, plan, do.

#behavioural finance#investing#investing philosophy#investment philosophy#investment strategy#portfolio strategy
Jake · Apr 2, 2026 9:35 am

The stock markets continue to reflect uncertainty over the Middle East. What I have noticed is the considerable decline in the share prices of many of the Magnificent 7. The market seems to have rotated out of the tech sector in a rather significant way. Share prices are down 20-25% from the most recent highs.

What I have noticed in my own behaviour is a lack of conviction in the strategy that I have tried to implement. My portfolio continues to display considerable volatility. I get excited and hang on when the market moves up, and become concerned when it moves down. I want to reduce my exposure to stocks, but do nothing to implement the strategy. It’s the same old story, a deer locked in the headlights, and I can’t move.

Fortunately, a couple of months ago, I lightened up on a lot of the stocks that have taken quite a nosedive. But I still have several stocks that are not consistent with my developing desire to mitigate the risk in my portfolio.

The takeaway from all this is simple. I have failed over the years to develop an investment strategy, so I am like a cork tossed in the waves. Because of my personal issues, I fail to do what I need to do. It’s always the same story: you cannot succeed if you are not prepared to act. Anxiety and a lack of self-confidence lead to dysfunctional decision-making.

In addition, not adjusting your investment strategy to your stage of life will cause anxiety, distress and a failure to make critical decisions.

#behavioural finance#investing#investment philosophy#investment strategy#investments#portfolio strategy
Jake · Mar 24, 2026 8:57 am

Yesterday’s stock market bounce may very well be a “dead cat” bounce. In other words, just a pause in the action. The market today looks a little bit soft, but it was nice to see some return to a level of optimism. Perhaps this was misplaced, but that’s the way the market operates.

The point I would like to raise is how this affected my behaviour. What I mean is this. I went from pessimism (woe is me, why didn’t I buy the index and some safer ETFs) to why can’t I buy more stocks or gold. It’s the same old story, trying to time the market.

This kind of behaviour is a type of mental “whiplash”. It shows a lack of conviction in my principles, which are poorly defined. Again, this leads back to a well-developed Investment Policy Statement. Always back to first principles. And getting away from that in whatever I do is dangerous.

The Investment Policy Statement is the basic document that will allow me to keep my focus and avoid bouncing all over the place. Today, I will spend the day developing, refining, and concluding it.

#behavioural finance#investing#investing philosophy#investment philosophy#investment strategy#investments#portfolio strategy
Jake · Mar 23, 2026 7:56 am

Monday morning, waiting for markets to open. Today I decided that I won’t be looking at the goings on. It’s not productive and not useful, as I won’t sell into the pending chaotic days ahead. That doesn’t mean I won’t fret. However, I have noticed that although the markets are down from the highs, individual stocks have fared much worse. It just reinforces my next steps to reduce the volatility of my portfolio. I look at some of my old posts, and I didn’t take my own advice. Sorry state of affairs.

#behavioural finance#investing#investment philosophy#investment strategy#investments#portfolio strategy
Jake · Jan 15, 2026 12:41 pm

Sometimes it’s hard to give up old habits. I’ve tried my hand at stockpicking for a long time. What I did not learn is that you should sell when others are buying and buy when others are selling. In April 2025, I should have been loading up. Instead, I was selling. The corollary of that is now I should be lightening up, but for many reasons, I can’t be out of the market. So as I mentioned before, looking at ETFs. For the most part, the ones I’m looking at did a lot better over the last few years than I did.

I didn’t trust my instincts. Sold too early into falling markets. Didn’t learn a darn thing in 50 years.

#behavioural finance#investing#investment philosophy#investment strategy#investments#portfolio strategy