Investments
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Reducing Regional and Political Risk in Your Investments: Overcoming the Backfire Effect
Reducing Regional and Political Risk in Your Investments: Overcoming the Backfire Effect When it comes to investment decisions, our brains often cling tightly to existing beliefs, even when faced with conflicting evidence. For example, my daughter’s basketball team lost 18-0 last night, no joke, they didn’t score a single point ! But when I think about their team this morning, I still cling to my belief that they are great, a team capable of winning the league. This behavioral phenomenon is known as the backfire effect, it causes us to double down on familiar but flawed ideas rather than reevaluate [...]
Stephen’s Value Investing Roots
This summer, while I was back on the farm reminiscing about childhood with my family, the topic of the money board came up. What is the “money board” you might ask? It was the bane of my childhood existence, but now it is better known as the method by which my mom taught us about morals, math, and money. When I was young, my sisters and I could earn a weekly allowance if we did our chores but if we misbehaved it would be taken away. Mom kept track of our earnings and losses on the “money board” and [...]
Why Extraordinary Investors Avoid Winners – Attention, Availability, and Overconfidence Bias
I was watching the baseball world series back in Oct of 2005 with some college buddies and during the pre-game I seemed to be the only one excited. The White Sox had a chance to make history by closing out the series in 4 games. As the night went on the excitement spread and by the end, we were all celebrating and caught up in the moment as the confetti flew and fireworks blew up. The White Sox finished the sweep, beating the Astros 1-0 and were crowned World Series Champions. My buddies, the city of Chicago, state of Illinois, [...]
Comparing Loans in the Peer to Peer Real Estate Market
Have you ever been sold on something too good to be true? Just recently I made an appointment to get our van’s windshield replaced. I was told over the phone to bring a check for $300 and drop off the car in the dealership parking lot. After waiting about 45 minutes with three kids in tow, I found out it would cost closer to $1000, and I needed to come back later when they had the correct glass. If I had done a little more research and gotten a couple more quotes, I probably would have known from the start [...]
Smart Diversification: 3 Steps to Take With Your Peer to Peer Portfolio
In my last post on Peer to Peer (P2P) Lending, I spoke about how we need to diversify, but we run into a problem if we try to just invest in everything. We have way too many P2P marketplaces, 106 to be exact, and so it is impractical to buy the whole sector. Even if we had the money to diversify across all the loans available in all the platforms, it would not be a wise choice as some loans are just too risky. Instead, we are constantly evaluating the best way to diversify. What do I mean by this? [...]
P2P Lending Platforms: My Experience With Peer to Peer Lending
As our domestic stock market has become expensive, we continue to look for something better. One area HIT revisited in 2018 was the category of fixed income. The high-level overview of an asset class worth more than $247 trillion has since led me to focus on the specific sub-category of peer to peer lending. To my surprise, my sister showed a keen interest in the topic and as I started to dig, I found her in the trenches alongside me. We have since teamed up and researched over 100 different Peer to Peer lending platforms across the world. So without [...]