Being reasonable is more realistic than being rational

Being reasonable is more realistic than being rational. Even if there is a perfectly rational strategy, it is useless if it cannot be executed. Morgan Housel distinguishes between 'reasonable' and 'rational.' While it may be optimal to put all your money into stocks rationally, if it causes sleepless nights, it is not reasonable. A strategy that fits one's personality, lifestyle, and stress tolerance is better than a mathematically optimal strategy because it can be executed and maintained. An 80-point strategy that can be sustained for ten years is better than a 100-point strategy that is abandoned in a month. A sustainable strategy is better than a perfect one. Morgan Housel (1984–) is the author of "The Psychology of Money" and a partner at Collaborative Fund. A former columnist for The Wall Street Journal and The Motley Fool, he popularized the 'behavioral finance perspective,' emphasizing that behavior and emotions are more important than IQ in investing, becoming a bestselling author in 54 countries.

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