Akerlof when confronted with this fact said i know

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Unformatted text preview: rest investment. Markowitz, age 77 at the time, says, “In retrospect, it would have been better to have been more in stocks when I was younger.” George Akerlof, who won the Nobel Prize in Economics in 2001, invested most of his money in money market accounts, which tend to have relatively low interest rate returns (but are safe). Akerlof, when confronted with this fact, said, “I know it’s utterly stupid.” Clive Granger, who won the Nobel Prize in Economics in 2003, was asked about his investments. He said, “I would rather spend my time enjoying my income than bothering about investments.” Daniel Kahneman, who won the Nobel Prize in Economics in 2002, said the following about his investments: “I think very little about my retirement savings, because I know that thinking could make me poorer or more miserable or both.” Keep in mind what we said in an earlier chapter: almost every activity comes with both benefits and costs. Benefits can come from investing wisely, but certain costs are involved too. It takes time to find out about various investments, to research them, and to keep informed on how they are doing. The actions of our four Nobel Prize winners also point out something else. As we said once before, many people think that economics is simply about money and money matters. It is not. It is about utility and happiness and making oneself better off. Each of our four Nobel Prize winners might not have been doing the best thing for his wallet, but certainly each knew it and continued on the same path anyway. In other words, each was willing to sacrifice some money in order to live a preferred lifestyle. What is the lesson for you? Should you care nothing about your investments and hope that your financial future will take care of itself? Or should you spend time regularly watching, researching, and evaluating various investments that either you have made or plan to make? Neither extreme is too sensible. It is not a matter of either one or the other. I...
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