The Impact of Financial Hardship on Investment Styles
Couldn't agree more.
I've never bought anything expensive in my life. When I visit even a slightly upscale place, I break out in a cold sweat, feeling that my humble status makes me unworthy of being there.
The same pattern showed up in my stock and fund investments—I only dared to buy cheap ones, never the expensive ones. As a result, the expensive ones kept getting more expensive, while the cheap ones kept getting cheaper. In practice, this meant I was too scared to buy during rallies and just watched them climb, while in downturns I'd think they were on sale and rush in, overestimating my ability to hold stocks. Every day I held a position felt like torture. I kept buying as prices fell, got trapped, and ended up frequently cutting my losses with severe damage.