Why Investing Is So Hard

See page for author [Public domain], via Wikimedia Commons

Sleep per Day: (Target) 7h30m / day (Actual) 7h16m  / day (53 day average)

Investing is so hard.

The intensity of competition in investing means that there’s “very little upside to outperformance and massive downside for underperformance. In other words, there is a lot of dumb stuff you can do in the stock market to lose money“.

If you start off with extremely small sums of money, stock commissions will kill you if position sizes are too small or if your turnover is high.

If you concentrate your investments with lower turnover to combat it, lack of diversification and lack of in-depth insights will kill you if any one of your positions die.

If you don’t hold enough cash (eg. you’re investing way too much money), lack of pain tolerance and huge volatility will kill you.

Even if you hold enough cash, lack of patience (trading = negative sum game) and lack of discipline (not sticking to an investment plan through a full cycle) will kill you as well.

Thinking too much will kill you when you’re constantly coming up with new investment ideas that might change your portfolio drastically if you don’t have the cash to implement them as they come.

Thinking too little will kill you as well when you insist stubbornly on an investment strategy that is getting obsolete or miss out on opportunities to optimize your portfolio.

Investing is so hard.


Not advice. No offer. Do not rely. May lose value. Risky. Conflicts hidden/obscured. (Borrowed from Terrence Yang‘s Disclaimer on Quora)


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