Why Investors Need a Latticework of Ideas, with Morgan Housel
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Are You Using the Risk Assessment Questionaire?
A lot of financial advisers try to gauge a client's risk tolerance by asking them how they would feel if the stock market were to fall 30 %. This is not really a forecast of the future, it's just an extrapolation of how you feel to day. So i highly recommend using past behavior and viewing how people acted in the past as a mirror for what they might do in the future. I would tell young people that during the next bear market, you're going to learn about a lot about yourself. And rather than fearing those bad decisions, use them as a base line of learning.
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