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This is a list of the highest grossing films for each of the past 30 years.
Ask yourself, how many of these movies have you seen more than once?
1983. Return of the Jedi
1984. Indiana Jones and the Temple of Doom
1985. Back to the Future
1986. Top Gun
1987. Fatal Attraction
1988. Rain Man
1989. Indiana Jones and the Last Crusade
1990. Ghost
1991. Terminator 2: Judgment Day
1992. Aladdin
1993. Jurassic Park
1994. The Lion King
1995. Die Hard with a Vengeance
1996. Independence Day
1997. Titanic
1998. Armageddon
1999. Star Wars Episode I: Phantom Menace
2000. Mission Impossible II
2001. Harry Potter and the Sorcerer’s Stone
2002. Lord of the Rings: The Two Towers
2003. Lord of the Rings: The Return of the King
2004. Shrek 2
2005. Harry Potter and the Goblet of Fire
2006. Pirates of the Caribbean: Dead Man’s Chest
2007. Pirates of the Caribbean: At World’s End
2008. The Dark Knight
2009. Avatar
2010. Toy Story 3
2011. Harry Potter and the Deathly Hallows – Part 2
2012. The Avengers
2013. Oz the Great and Powerful
One reason we enjoy watching movies we’ve already seen before is psychologist have found we are happiest when what we expect will happen, actually happens.
Companies came to this conclusion as well and started using signs like these to make waiting in line less stressful.
But what about when there are multiple options such as freeway lanes or grocery store checkout lanes?
The competitor in me comes out whenever I’m stuck in traffic and have to make a choice concerning which freeway lane to be in. Once I made my decision I’ll find a car or truck in the lane I was in “race” it to my off-ramp.
Which brings me to investing and driving…
In my commute between home and work I, have two main options (freeway or side streets) plus several smaller streets and off ramp variations of these routes.
My experience driving each of these routes during various traffic and weather conditions has led me to expect a very narrow range of total commute times with the side streets option (from 20 minutes on the short side to almost 30 minutes on the long side) vs. a much wider range of times with the freeway route (from 15 minutes on the short side to one trip taking me almost an hour).
Going back to being happiest when what we expect will happen actually happens, I’m rarely disappointed when I take side streets because my actual experience and what I expected would happen almost always match up. Unlike taking the freeway which can be fantastic or frustrating based upon conditions outside my control.
I’m sure thats why bond buyers seem to be more satisfied with their holdings and don’t trade as much vs. stock buyers.
The chart below shows the monthly year-over-year percentage change in Bank of America Merrill Lynch AA Corporate Bond Index (high quality bonds) and monthly year-over-year percentage change in the S&P 500 Index over the past 15 years.
The wide range of stock market returns from high highs to low lows makes it difficult to reliably have experiences that line up with your expectations.
Of the 180 data points in this chart, the bond index had 19 negative year-over-year time frames with the an average decline of 2.2% while the stock market had 53 negative year-over-year time frames with an average decline of 18.9%
How many different routes are there from your house to your work?
Do you drive the same path all the time or do you vary based upon traffic, time of day, rain, etc.?
When it comes to investing, how many different paths such as stocks, bonds, real estate, art, etc. do you feel comfortable investing in?
Do you invest in the same fashion all the time or do you vary based upon news, interest rates, unemployment, etc.?