As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

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Wednesday, 24 November 2010

Utility of additonal wealth and investment choices

Read? What's wrong with REITs and NCPS?

Before you start borrowing big fat boys' investment strategy, you may want to understand the behaviour theory behind it.

Bernoulli (1738) popularised the concept of the utility of additional wealth is inversely related to the amount already processed. This may help to explain why many wealthier individuals (big fat boys) may be more inclined to choose fixed income investments over day-trading. Their unwillingness to assume greater risks is related to their perception that they have much to lose in the realm of personal possessions and not much to gain in the realm of personal needs.

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