Pillars of Financial Wisdom

My Collection of financial Wisdom for the longtime ETF investor

Groundtruthes

• With Patience and Diversifikation, nothing can go wrong.
• time in the market beats timing the market (Why?)
• Don't double down on bad trades (DDD)
• Invest without forecasts (Exceptions only if you are a leading expert in the topic you are investing in)
• Review your portfolio regularly and rebalance as necessary.
• Let changing facts change your opinion. Not the strongest, but the more adaptives survive!
• Close a Trade, if you wouldn't also start it right now!
• "It is insane to risk what you have and need in order to obtain what you don’t need” --- Berkshire 2018 Letter

Financial crisis

• Don't sell your high quality investments out of fear.
  • Would you sell your house, just becouse of temporery depressed prices? (More Info)
  • Look at lower stockprices like at a sale in the supermarket and be happy about it.
  • A Crisis is a big Oppoutunities that has to be seized. (Buffet)

stay openmindet

• Don't be a PURE guy, that only trades one topic like Crypto Currency, Gold or other nieche markets, without good couse like a deep expert knowledge
• Don't invest like the Apocalypse is coming. Doomsayer are bad investors.
• No shame in being wrong, only in failing to correct our mistakes.

Meanreversion is real

• but the market can be longer irational (are you sure?) as you solvent.

No Regrets

• With hintside everithing is easy, but it is resly hard to act rationaly in the heat of the Moment. Don't be to hard on you self, its only obvious after the Fact!

Tailrisk is real Risk

• Shit hits the fan all the time!
• DDD

Can't reliable beat the market, exept with Factor Etfs

• Value.
• Small Caps.
• Momentum.
• Low Volatility.
• Dividenden.
• Quality.

financial relevant cognitive biases

• Anchoring (Don't wait for a bad trade to break even)
• Confirmation Bias (find pro an d contra arguments for your investment)
• Declinism (Be more Optimistic)
• sunk cost fallacy (aka excalation of commitment)
• gamblers fallacy
  • just because the stock did fall the last nine days, it doesnt has to go up next day. 9 loosing cointosses don't make the next one a winner! (aka dont double loosing trades)
• survivorship bias
• current market is only made up of companies (not yet) failed. Test your strategy with the historic marketcomposition to include failed stocks too.
• law of triviality (solve the most rewarding problems first, not the easy ones...finding a cheaper broker is less important than finding the right strategy)
• Clustering Illusion (we see patterns everyware, even in random data)
• blind spot bias (yes you too have all this biases your self, even if you don't see them in you)

Stockmarket is a game of probabilities

It doesn't only help to understand the mathematical foundations of probabilities, but to get more hands on expierence by learning other games of Chance and Money like Poker. Risk and Moneymanagment are integral parts of this game too. And its way more fun than starrying at charts all day, and making Errors out of Boredom and impatience.

Study the Historie

• Those who do not learn from history are doomed to repeat it.
  • Learn about past Bubbles und other relevant historic events.

My Opinions

• Mainly invest in stable democraticies, they are more consistend
• savings for a rainy day, help weather the lows with a sane mind
• Doesn't pay too be a early adaptor. Product (like an ETF) with long good history, is better than new product with excelent but short History(just out of luck).
• Maiking more money is better than saving money.

https://corporate.nordea.com/article/67765/global-how-to-position-for-a-clearly-weaker-credit-impulse