We Are Too Pessimistic About Finances

When things go wrong, we tend to think of the worst.

• This usually does not happen.
• Predictions made for post 2008 were extremely negative.
  • None was fulfilled

We underestimate the ability of markets to adapt

• We make predictions that extrapolate from current data, regardless of future changes in circumstances.
• Progress happens too slowly for us to notice, but short hiccups happen so fast that we despair.

LOK: 4. Management
RL: Psychology of money
IDEAS: Personal finance