Investing Smart and reducing the risk

Investing Smart and reducing the risk  

Charles Ellis in his “My Investment Letter: Words of Advice for My Grandchildren has stated that when it comes to investment, the secret to success, just like driving is not making big mistakes

Human beings aren’t rational. We do not consider expected outcomes. You find takers for such baits, even though the overall odds of winning are 1:32 (3%)

As human beings, our brains rationalise through overconfidence i.e. by believing that present conditions will continue into the future, market will continue to be in a bull