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Emotions in Check?

Losing sleep over your statements?

Tempted to abandon your investments?

Constantly checking returns?

Info overload got you stressed?

Rotate the wheel
Daily
Monthly
Quarterly
Yearly

Wheel of Investor Emotion

Rotate the wheel to see the emotional results of checking your investments too often!

Your chance is % to see a gain

That’s roughly a good-to-bad ratio

Typically this is how you feel

 

Because you gain Units of Emotion*

While you lose Units of Emotion

Wheel of Investor Emotion

Prospect Theory

*Prospect Theory states that for every good result a person sees, 1 Unit of Emotion is gained. But, when a bad result is seen, 2 units are lost, since a loss has twice the impact. Excessive checking can therefore lead to stress…leading to poor decisions. Someone might even abandon a plan as successful as the one used in this wheel’s calculations:

Period invested = 20 yr | Annual return = 15% | Volatility per annum = 10%. After the period, an initial $100,000 investment would total $1,636,654. The examples contained herein are for illustrative purposes only. Source: Fooled by Randomness: The Hidden Role of Chance in Life and the Markets, by Nassim Nicholas Taleb. Publisher: W. W. Norton & Company (October 2001) ISBN-10: 1587990717

Calculation assumptions (period invested = 20 yrs, annual return = 15%,
volatility per annum = 10%) should not be taken to represent the historical
or future performance of any product managed by Bridgehouse.

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Bridgehouse Asset Managers® is a trade name of Brandes Investment Partners & Co. (Bridgehouse). Brandes Investment Partners® is a registered trademark of Brandes Investment Partners, L.P. (Brandes LP). Bridgehouse and Brandes LP are affiliates. Bridgehouse is the manager of the Bridgehouse Funds and has hired Brandes LP, Greystone Managed Investments Inc. (Greystone), Lazard Asset Management (Canada), Inc. (Lazard) and Sionna Investment Managers Inc. (Sionna) as portfolio sub-advisors in respect of the Bridgehouse Funds. Bridgehouse and its sub-advisors have taken reasonable steps to provide accurate and current data. The data has been gathered from sources believed to be reliable, however Bridgehouse and its sub-advisors are not responsible for any errors or omissions contained herein. Bridgehouse and its sub-advisors reserve the right to modify or change their investment strategies or techniques at any time, based on changing market dynamics or client needs. Units and shares of the Bridgehouse Funds are available through registered dealers only and are not available through Bridgehouse. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.