An investment journal is a note written when you buy or sell: why, what you expect, and what would make you change your mind. Kept together, the notes become a decision log. Its value comes from memory being unreliable. Baruch Fischhoff showed in 1975 that once people know how something turned out, they remember having found that outcome more predictable than they did — hindsight bias.
A written note also separates process from outcome. In Jonathan Baron and John Hershey's 1988 experiments, people rated the same decision as worse when it happened to turn out badly. A share can rise for the wrong reasons and fall despite good ones, and a dated note is the only way to tell afterwards which happened. In the app, the Notes & ideas widget turns anything you did — a buy, a sale, a new target — into a dated note with the event filled in and the cursor after "Why:". On the web it's part of the Investor plan; in the mobile app it's on every plan.
Hindsight rewrites memory. It can't rewrite a dated note.
SOURCES
- Fischhoff, B. (1975). Hindsight ≠ foresight: the effect of outcome knowledge on judgment under uncertainty. Journal of Experimental Psychology: Human Perception and Performance, 1(3), 288–299.
- Baron, J. & Hershey, J. C. (1988). Outcome bias in decision evaluation. Journal of Personality and Social Psychology, 54(4), 569–579.
Educational content only. It is not personal financial advice.