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What Pokemon Go Can Teach You About Investing

Investing and Pokemon – an unlikely combination

 

Pokemon Go is finally in Singapore – and being the first augmented reality game to hit mainstream popularity, many news (sometimes unexpected) have come into the public eye. Yet underneath the cute demeanour of the Pokemon and overall fun factor of the game, we at DollarsandSense think that there are actually some lessons that can be gathered about investing principles.

Sunk Cost Fallacy

The game designers understand the concept of sunk costs very well and have masterfully implemented this into the gaming experience. Being a free mobile game that requires little time to start up, and easy Pokemon to catch right from the start, barriers to entry are low for new gamers, making it easy for players to get caught up in the game.

This leads to them spending more time, emotions and money on the game, and psychologically this creates sunk costs that make it difficult for players to quit. For example, if you are halfway through training a Dragonite, it would seem like a waste to not hit as high a level as possible.

The same is also true for investing. If you spend a lot of time researching on a stock, then buying huge amounts with conviction, this makes it difficult to let go of the stock if the price goes against you. Many investors have taken huge losses, often more than expected because they refused to admit that their initial analysis was wrong or they were simply just hoping that the price would return to their buy levels.

No Shortcuts

Another interesting thing about Pokemon Go is the level of detail developers put into the game design, especially when it comes to preventing any system gaming. In particular is the egg hatching system, which has been calibrated to only trigger when the player is walking. Hence, those seeking a shortcut to egg hatching by sitting in a car or running on a treadmill will find that their eggs will not be any closer to hatching.

The lesson to take away here is that there are no shortcuts when it comes to learning to be a good investor. Signing up for investing courses and then expecting to step out fully qualified and able to make money is not realistic. It requires a lot of perseverance and time spent looking at the market to find out what works and what doesn’t – just like egg hatching, the best results tend to come from good old-fashioned hard work.

Read Also: 10 Quotes From Warren Buffett We Can All Learn From

Top Image Credit: DollarsAndSense.sg

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