We tend to associate more importance to recent events than we do to less recent ones.

The more vivid our memory of something which occurred in the past is, the more “available” that event will be in our mind and the more probable it will seem to happen again. But that’s not the right way to assess risk.

An event does not become more likely to recur merely because its last occurrence was recent, memorable, or still on-going—like the current bull market of ’08-’17.  Many people implicitly presume that the market would forever continue its gains (not talking about Singapore here), forgetting the fact that bear markets occasionally happened in the more distant past.

Our perception of history extends back only about ten years.  Blame that on our fading memory. This leads us to believe that government bonds are safe (mind you, a bond is just a promise, nothing more than that!). It further …