Ignore the Hype

Chapter 10Sorry, But You're Probably Your Own Worst Enemy

Are you ready for some bad news? I hope so, because I'm here to tell you that when it comes to your finances, the sad reality is that you are likely to be own worst enemy. In fact, the most painful recession or bear market probably won't hurt you as much as you'll hurt yourself.

It's not really your fault; the problem is that your brain didn't evolve in a manner designed to facilitate optimal financial decision-making. How could it have?

Evolution teaches us that humans have been around for roughly 200,0000 years. Before that we evolved from apes, small mammals, lizards, and, long, long ago, tiny single-celled sea creatures. And I'm guessing that pretty much none of those long-forgotten predecessors spent a lick of time worrying about whether to buy U.S. or international stocks, or if Amazon's stock was overvalued, or whether they should go short the Yen versus the Euro.

Take a moment now and spread your arms as wide as you can. If that distance from your fingertips on the left to your fingertips on your right were a timeline that represented the history of the earth, then proportionally, the length of time humans have been around would be about as wide as your fingernail. That should give you a sense, on a cosmic scale, of how unimportant financial decision-making has been across the eons.

That's the nature. Now let's consider the nurture. Because even if we flash forward to the point where humanity was well established, ...