Richard Thaler taught us to use Behavioral finance, and even though it has its critics…we should make some attempt at using it. Here let us see how it can be used for altering our behavior.
Here are some simple retirement mistakes to avoid….
- Remember that even if you are 60 years of age, you could potentially have another 40 years to live.
- Longevity is neither a blessing or a curse – but you need to be worried about inflation – which your parents did not!
- Be calm when there is noise around you. At home. And in the markets – debt or equity.
- Sitting still is very rewarding. Look at Warren Buffett and Charlie Munger. Meditation helps.
- Past performance is past performance. You cannot look at the rear view mirror ONLY and drive. Look ahead.
- Age takes its toll on your ability to think and react fast – remember it.
- If you can involve a younger person (preferably in 40s or younger) it will be great.
- Keep testing for falling cognitive abilities. It could start even in the 50s. Nobody will tell you. Beware.
- Remember the impact of mood swings while investing decisions are made.
- New Investment proposal – take in all the details and decide after speaking to your progeny or sibling.
- Remember the basics of investing – diversification, asset allocation, etc.
simple no? Just do it.
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