There’s a lot of shor about what’s FOR.
Frame of Reference. This is the most important yet underestimated factor.
Whether you want to upgrade your happiness package or you want to Invest better. Zoom out a little, focus on the frame of reference.
If you think you are poor, imagine yourself watching TV having popcorn in 1930’s. You’d probably be the prince.
Tired of slow wifi speed, consider the era when one had to go to cyber cafe to use internet. Would you still be complaining ?
Now how does this help in investing better ?
You must have compared 2 equities of same industry. Or inter industry returns.
But we frequently dont compare that return with the FD. A Risk-Reward relation of a FD would be pretty much better in 95% cases over a stock selling at PE of lets say 100. Yet you can find many.
This FOR helps you keep money in FD when there’s no need for investment to happen.
If people were always doing it, I’d doubt, a stock market bubbles will ever exist.
DIY
Just before making an investment. Compare your current investment’s risk-reward relation to a FD. It helps bring perspective.