I get the small country stuff. Well, big country, small number of people, harsh climate and terrain. Canadians are the super patriots who always tell themselves they are not very patrioticThanks Valuethinker,
I enjoyed reading your post.
I noted that a few of my reasons for the asset allocation would not stand up to scrutiny, and you've proved that point:)
Minerals: regulatory and legislative changes within Australia may undermine their performance from a shareholder perspective dramatically.
Patriotism: purely emotional and acknowledged. In many ways Australia does not realise it's small power/influence on the world stage. If we do realise it in pockets, we don't necessarily act on this realisation on the world stage or with our internal decisions.
Kahneman and Tversky: I am aware of more personal bias than I used to be after reading their books. This hasn't necessarily led to changed decisions in all areas of life though I should arguably apply this awareness more often to decisions such as investments.
Financials: our financial sector is less prone to such major failings, though they obviously exist. Recent Royal Commission and other regulatory reviews/changes have led to such tight regulation, that it risks slowing the economy which may be a worse outcome.
House: a 50% drop in value and then being forced to sell at that low value would result in a nominal 250k loss (and lost opportunity cost). Not an impossible scenario, and if eventuated would not ruin me as you note. More likely I would aim to hold (cost neutral) till a rosier future arrives.
Resolve (context): I really like your military examples and references. I could apply similar in the medical field, where anchoring bias (and others) or inability/unwillingness to shift position/approach/thinking resulted in harm/death (for single patients, or entire populations). The outcomes of such 'resolve'/'pig headedness' in these contexts results in real harm to people. The use of resolve in a decided asset allocation may result in financial ruin, and that may indirectly lead to relationship breakdown and in an absolute worst-case scenario premature death. I consider the consequences of the pig headedness I've shown in the 50/50 Int/Aus split for superannuation investments as acceptable. It is however long overdue I considered its appropriateness, and that was one of the drivers for me posting:)
Murdoch
. The following clips are from "Heritage Minutes" a series of 1 minute vignettes of Canadians and Canadian history. They all relate to D Day (the first one is called "D Day)https://www.youtube.com/watch?v=-AuKXAf ... A&index=12
https://www.youtube.com/watch?v=stnMHGw ... 4A&index=9
https://www.youtube.com/watch?v=JCWANop ... A&index=10
You have done the right thing, which is periodically stop and check your thinking. What you are doing all sounds sensible, I just question the ASX overweighting. I would suggest 20% is the thing to aim for, but you don't need to do it all in one go.
Institutional momentum and group dynamics leading to manifest stupidity. And a refusal to admit something is not working. I can think of a very good British example as we speak
. But it must be hard to build up an Empire, think you count in the world, and find out it's the 21st Century and nobody is that bothered about the 19th C. Also Island nation (or rather, nations) which complicates things even further.Statistics: Posted by Valuethinker — Thu Jun 06, 2024 3:10 am — Replies 9 — Views 1322