Methods used to make financial/belief decision & judgments

[bloobs]

I am curious as to how members here make their TSP investment decisions (or other important decisions for that matter). The survey lists the most common approaches or tendencies. Details that distinguish these types are in the link below.

https://www.unitar.org/hiroshima/sites/ ... rences.pdf

Feel free to expound on how well it has or been working for you.

[Tomanyiron]

Factual data & Conclusions are almost the same. I might have replaced one with "NEWS".
Edit: "News Related"

[Aitrus]

I agree with Tomy - factual data and conclusions are very similar. The main difference between the two is the application of critical thinking. Data is unapplied information - it just exists as is. Conclusions are what come when data has been considered in context with other applicable information, and is thus a more complete picture of what's going on - assuming that such critical thinking is as unbiased as possible.

[bloobs]

Factual data & Conclusions are almost the same. I might have replaced one with "NEWS".
Edit: "News Related"

This survey's context is of TSP decisioning. As such:

1. Factual Data - an example would be using MJ's TSPCALC application. The decision data in this case are the resulting average return + std deviation. It's not "raw data" per se, since these are calculated--but those 2 data points by themselves are all that's needed for most of us to SELECT a strategy. MJ's app makes the calculations and CONCLUSION for us.

2. Conclusions - are when WE OURSELVES perform the calculation based on the raw data. An example is this app: https://public.tableau.com/profile/acme ... losev3/EFA. Conceptually, it uses the same daily stock market share price datasets and calculations--but it lets the end user determine what parameters and questions s/he wants to define and what answers need to be calculated for that end user to derive his/her own conclusions.

The difference is subtle.

Regardless, I am sure we all agree that OPINIONS are typically the WORST method to use in these types of decisions. Sadly, it seems that most of us resort to this--and it shows accordingly in outcomes.

[Midway]

I chose conclusion since in the end, I make the choice to act. Whether it is choosing what parameters on TSPcalc are important to me, who on the leaderboard is best to follow, or what the bones and tea leaves say, it is my conclusion. Or is it Opinion?

[stilljammi]

In a perfect world, recommendations would be the best choice because recommendations are perfectly derived from conclusions, which are perfectly derived from data. Opinions would be the worst because it's derived from any one of the three but influenced by emotions and biases.

To say it another way:
data + processing and consideration = conclusions.
conclusions + problem-solving = recommendations.

Unfortunately, we all process data differently and we may let emotions alter that data. If we fail at that, then any conclusions are faulty. Also, we may not be problem-solving correctly even with the right conclusions, choosing the wrong tool for the job.

And finally, data is not always reliable. Or more accurately, we cannot easily distinguish data from non-data.

[McWinning]

For sure opinion, because of all the reasons stilljammi listed. I'm an imperfect human with imperfect tools. My conclusions are flawed and represent an opinion, which may be opposite from another conclusion/opinion drawn from the same data/facts.

[McWinning]

I read this article today that seems relevant to the poll topic as it relates investor psychology. The author argues that news headlines have almost no correlation to stock market prices and he uses an older study as data supporting that position. I know from reading his previous articles that he uses a variation of Elliott Wave theory (mass investor psychological trends) to predict target prices in the S&P500. I'm not convinced, but it's an interesting perspective that attempts to explain the current "detachment" of the stock market from the underlying economy. In my opinion, I choose to believe that the stock market is going to come down to meet the real economy fundamentals, which are historically depressed according to much financial reporting. I'm still following this author to hopefully learn from my mistakes if my opinion proves to bear a poor investment outcome.

Topic article:
https://seekingalpha.com/article/435529 ... -right-now

Elliott Wave background:
https://www.investopedia.com/articles/t ... 111401.asp

[bloobs]

Thanks for the thoughts and insights guys.

I guess the purpose of my survey, besides learning about your personal decisioning habits, is to convey an awareness of HOW we tend to make decisions, especially the areas where we could do better.

I've noticed that MOST people easily mistake opinions (which are chockfull of biases) from conclusive facts ALL the time, which almost always leads to bad decisions and its resulting detrimental outcomes.