Edition #13: Distance Makes the Dollar Grow Stronger

Plus: Distance and the Dollar, "Hey Dad, are we rich?", 23andMe, Fintech=Free

Hey there, money you manage like Yoda.

• Last week, I went deep covering Coinbase
• Today, I cover the role of psychological distance in investing, Michelle Obama’s podcast, 23andMe, and why everyone should try a fintech.

Distance Makes the Dollar Grow Stronger

Between 1977–1990, Peter Lynch returned an astounding 27% for Fidelity’s Magellan Fund. You’d think investors in this fund would’ve received the same gains, but the opposite happened: most of them lost money. How could that be?

Investors touched their money too much, jumping in and out of the fund. In other words, they bought high and sold low.

Had they just kept some distance from their money, they might have been less emotionally reactive to the market — and benefited from Lynch’s golden touch. In a similar vein, maybe that’s why index funds outperform actively managed funds.

This is easier said than done, of course. I don’t need to reference any studies to convince you that long term thinking is harder than short term thinking.