While reading upon an article in The Aleph Blog, made by famous investor David Merkel, I learnt a lot about the psychology of the investors. In Merkel’s article Risk Tolerance – The Ability to Deal with Loss, he addresses that while investing, investors are more likely to change their investing behavior or activities after a loss rather than a gain: ” People feel losses much more acutely than gains, and are far more likely to change their behavior after losses. Can’t tell you how many times I have had people say to me, ‘I’m never buying stock again,’ after 2000-2 and 2008-9.” I very much agree with this statement when putting myself into the perspective of an investor. Like the famous quote “you learn from your mistakes”, what Merkel is implying here is only losses in investment help one better prepare oneself with a plan for the future.