Ambiguity Bias

Ambiguity Bias

When people make choices, sometimes they have a good understanding of the probability of something happening whilst other times the situation is ambiguous, whereby the probability of the event is unknown.

In such situations, people are more likely to choose the former situation, preferring a known probability over an unknown probability.

Investing in Fixed Deposits is preferred because the outcome is clear unlike investing in a mutual funds despite the fact that mutual funds beat Fixed Deposit returns hands down.

This is known as Ambiguity Bias.

It is important to know why your investor thinks in a particular way.

Managing investor behavior is the heart of Financial Planning.

Name: Devarajan S

Firm Name: Devarajan, Insurance Advisor

Mobile: 9840177017

Email: customerwin@gmail.com

Email: myfamilyagent@gmail.com

Website URL: http://starhealthdevarajan.com/

 

Story of the Week. One Last Chance

 

Story of the Week. Never give Up

 

The biggest challenge for people in jobs is "how long"?

The biggest challenge for people in jobs is "how long"?

People in the forties are in their last job.

Retirement at 60 is a big joke.

Life extends till 80.

Retirement journey is longer than employment journey.

Unless you compound your investment by injecting years into it, the fuel of your life will end before the road ends.

When a car stalls because of no fuel in the middle of the road and if there isn't any fuel station, the car just rusts and is junked into the scrap yard.

Plan well. This isn't a joke.

S. Devarajan 9840177017

https://evaunt.me/fL2pYg/SDevarajan

Whenever U thing of Insurance, Think of Us

 

Story of the Week. Muddy Road

 

"Be patient; wait until everything is in your favor to interest"

"Be patient; wait until everything is in your favor to interest"

Equity investing is a wealth creating mechanism. Buying equity is participating in the growth of the company. As companies grow, so will your money. There will be ups and down, there might be the volatility as obstacles for the growth but if you are investing, you are still buying a small part of a business. Equities are one asset class where you can beat inflation and by a large margin if you make the right decisions.

There are two emotions in the market: Greed and Fear. People come only out of greed. Greed is highest when market is at the peak of the bull phase. That is the time when 80-90 per cent of the investors enter the market, when actually no one should come close to it. They sell when fear is the dominating emotion, that's when the market is at the bottom. So they buy at the top and sell at the bottom. It will keep happening. You have to master these emotions. Buy when everyone is selling and sell when everyone is buying. If you do that, you will not lose money.

Stop checking your stock prices daily. Turn off TV shows. Don't follow the crowd. Invest in fundamentally strong companies and be patient, don't trade. Avoid direct investing; if you do not understand the company or have no time or resources to track the market then the mutual fund investments is the best route and leave it to professionals. Speak with your Financial Distributor today, invest regularly.

Name: Devarajan S

Firm Name: Devarajan, Insurance Advisor

Mobile: 9840177017

Email: customerwin@gmail.com

Email: myfamilyagent@gmail.com

Website URL: http://starhealthdevarajan.com/

 

Story of the Week. Soap Case Study

 

Bonsai

Bonsai

If a healthy seed of a giant tree is planted in a flower-pot, the tree that will grow to be a miniature version of the giant tree. This miniature version is known as bonsai.

It is not because of any fault in the seed, because there is no fault in the seed. It is only because the seed has been denied the real base to grow on.

In personal finance when you give your investments just a few years of "time" your base is like a small pot and the investment will mushroom into a bonsai.

But by providing the "investment" 10 to 15 years of "time", you change the base from a pot to a field.

Now the investment gets the right kind of base to compound and create enormous wealth.

Name: Devarajan S

Firm Name: Devarajan, Insurance Advisor

Mobile: 9840177017

Email: customerwin@gmail.com

Email: myfamilyagent@gmail.com

Website URL: http://starhealthdevarajan.com/