Let me start by saying this again “Short Term Thinking Hurts” and hurts bad.
Let us take some examples:
There is a wedding where food is served. Of course there are sweets, and very attractive food – well laid out, smelling good, looking good…and of course there is a huge salad table also.
There is short term pleasure in choosing sweets, right?
So let us say I choose a sweet. It is actually a LONG TERM pain, even though it is a pleasure for the next 30 seconds. It stays on MY waist for the next 30 years.
So if you think long term pleasure = a series of short term pleasures, it is WRONG.
Now if a 23 year old wants to invest what happens? He/she has some feeling that markets are risky (thank you media you have done a great job). Then he consults his parents…who scare him more. So the kid goes to the ‘friendly’ uncle who sells him a LIC policy. Is this short term or long term? Clearly long term, no issues here. Is it a saving product or an investing product? Clearly a saving product. Why because the markets are risky in the SHORT TERM.
So a short term scare has made this kid go to a less volatile and a very inefficient product.
In the short term equity markets look risky because of the volatility. However if you are investing for the long term you need to look at equity. The media with its shrill voices is not too great at improving the investment climate. They actually ENCOURAGE short term thinking and love trading.
So one way to avoid short term thinking is to stay away from the TICKER channels. Honestly. One of the top wealth creators said this on television itself a few years ago almost shocking the host, Udyan.
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