When it comes to food, what is good for our health seldom taste or sound exciting. Think bitter gourd.
On the contrary, food that whets our appetite is usually high in salt or sugar content which when not consumed in moderation, results in many different health issues like diabetes, high blood pressure and high cholesterol. Think char kway teow.
The funny thing is that despite being told that certain types of food are better for us and provided with tons of science and academic research about its benefits, for example, whole grains are better than refined (white) grains because it retains all the valuable nutrients, we often find it much easier to go with what looks better to eat.
The reason for this behaviour could be attributed to advertising.
Case in point about the whole grain example. On a Harvard university website which states all the benefits about whole grains, we learn that …
“All whole grain kernels contain three parts: the bran, germ, and endosperm. Each section houses health-promoting nutrients. The bran is the fiber-rich outer layer that supplies B vitamins, iron, copper, zinc, magnesium, antioxidants, and phytochemicals. Phytochemicals are natural chemical compounds in plants that have been researched for their role in disease prevention. The germ is the core of the seed where growth occurs; it is rich in healthy fats, vitamin E, B vitamins, phytochemicals, and antioxidants. The endosperm is the interior layer that holds carbohydrates, protein, and small amounts of some B vitamins and minerals.”
While your brain is trying to process all that information, you see the following image. Though your head agrees that whole grain is better for you, your taste buds or your eyes are sending you a different message. White breads are attractive but whole grain breads are better for you. The same can be said for your investment. Choose well researched “whole grain breads”, they are better for you.
The same goes when it comes to investing. There are evidence-based investment strategies, grounded in tons and decades of academic research, that may increase your potential return and decrease potential risk. Sound advice may not appear on headlines or attract your attention like hype stories on “How to pick the best stocks now” or “20% returns in one year. How you can achieve it too”, but they can do something much more important: increase the probability of reaching your financial goals.
Author: MoneyOwl’s Solutions Team
Cover image from Unsplash.