Last year reminded everyone that investing is hard. It can be uncomfortable and unpleasant. Market volatility can diminish willpower and cause determination to waver. The main risk is not portfolio declines. The real risk is that instincts override the discipline investors need to achieve their long-term plan.

Today, a few clicks lets you buy stocks anywhere. With the world's stocks on every menu, investors' have collectively allocated capital according to the cartogram. Yet individually, investors greatly prefer domestic portfolios.

The world runs on incentives. Often, the challenge in investing is to figure out how to entrust your money with people whose incentives are best aligned with your own.

In the short term, markets are about Psychology;

in the medium term, they are about Economics;

and in the long term, they are about Valuations.

There is a tendency, even among those who have owned Apple, to daydream about having jumped on board even earlier: "But what if I had bought Apple right after its IPO in 1980?!"

Fear of the unknown is an instinct that helps us survive, but acts against our better judgment as investors. It pushes us toward the perception of safety.

Here are a couple of fantastic slides that highlight some favorite themes: diversification and the average investor's behavioral biases.

As you may know, we're big fans of Warren Buffett. His latest annual letter to shareholders is a buffet of fantastic takeaways, one of which we already shared.

Here's some more truth:

In a handful of words, this evocative quote by Tadas Viskanta - “Market Timing is a Gateway to Cash Addiction” - cuts to the core of a psychological obstacle that thwarts many investors.