Welcome to the end of the week and another edition of Happy Hour! Just sit back, relax, and enjoy your end of the week roundup of all things interesting in the land of money.
There is a sadder but wiser theory floating around somewhere. Who knew? Apparently, it doesn’t apply to financial decisions. A recent study tried to test the effects of sadness on our financial decision making abilities. It didn’t turn out well. Impatience is just one of the side effects of sadness. That just happens to be a no-no for your finances, especially investment decisions.
If that wasn’t enough, the impatience or sadness pushed participants toward wanting immediate gratification. Not surprising really. But when it came to money, they accepted almost 80% less money today instead of waiting for more money later. Now we have one more rule about money – Don’t make financial decisions when you’re down.
Euro Zone Turn Around
Things usually get worse before it gets better. Well, it did get worse. But now things might be looking up for Europe. While it’s not time to celebrate just yet, the first drop in unemployment is a good start to a future victory dance. The question now – is this a one-off event or the beginning of a trend? Hopefully, it’s the latter.
The idea of Europe officially mending and growing its economy would be great news. It would also bring the two largest economies and global growth back on track. Who needs emerging markets with Europe and the U.S. doing all the work. Lastly, if Europe is turning around, I guarantee there are investment opportunities there that have been overlooked thanks the U.S. stock market performance. And it’s not just in bonds.
- The Real Investment Risk is not Changing Your Thinking – Investing with an open mind and long-term focus
- ‘Shallow Risk’ and ‘Deep Risk’ Are No Walk in the Woods – article mentioned in the first post focusing on the important risks to watch out for.
- Asset Allocation Strategies – how different allocation strategies performed over the same time periods.
- How to Find “Hidden” 401k Fees – if you haven’t heard, fees hurt your 401k returns. Here’s where to look.
- Slow Ideas – interesting take on why some ideas take longer to be accepted than others.