Information Overload is altering our thinking
Continuous noise around us makes us think short - term in long - term alignments
Every time the markets go up, media headlines -
Investors get richer by 500,000 cr.
Ambani's Net Worth goes up by 80,000 cr. etc. etc.
Markets go down,
Investors get poorer by 400,000 cr.
Adani's Net Worth falls by 50,000 cr. etc. etc.
Now let's draw a parallel here.
Let's say you live in a house that is ~2000 sft and the price that you bought the house in was approximately 5000/sft valuing the house at about 1 cr.
Now, let's say there is a broker that shows up to your house and gives you live rates for the house.
Some days it is 4000/sft, some days it is 5100/sft.
Will your brain function like this?
My house has become cheaper by 20%
My house is expensive by 2%
While buying or renting a house is a discussion for another day, we are not wired to think like this when it comes to an asset that we live in, own for the long term and makes for ~75% of household assets in this country.
So why not have the same thinking when it comes to stocks?
Just because there is noise overload every where around us, does not mean we should change our outlook for long term assets - especially equities which is characterised by volatility of the highest order.
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