It has nothing to do with the commonly known psychological bias in the investing/trading world - Loss Aversion! No! It has to do with the reality and not so much on psychology!
The Maths of it! When we really need that cash, we can't raise enough cash from the Losers. The Losers are as they are. They CAN'T be worth relatively much more in our investment portfolio!
It is the Winners that we can raise enough cash to meet our liquidity needs! This is commonsense. This is reality! This is fact! Forget theory and concept! When reality hits us hard; our mind will tune into more practical way to solve the immediate issue or trouble on hand. Tio bo?
I am 61 yrs old uncle living in HDB heartland who has achieved financial independence @ 56 and retired @ 60 from full-time job as employee.
Single household income since 1995 with three children. Eldest son and daughter are now working and youngest son still in his 2nd year uni in SUTD.
I have been doing long-term investing and short-term trading in Singapore stock market only since Jan 2000 so I am that Panda or Koala in the investment world; but I am still surviving well in the wild.
I am now executing my Three Taps solution model to maintain sustainable retirement income for life till 2038.
Last updated: 3 Sep 2017
Disclaimer: Stock trading involves significant risks. Create Wealth trader is not a licensed Investment Adviser and will not be responsible for any losses which you incurred. You are advised to always do your own homework before making any trading decision.