I came across a rather interesting simulation of index investing. It tries to bring readers into a discussion whether you would want the index of which your unit trust or exchange traded fund is benchmarked to, to rise or fall within the next near term time frame. We all suffer from the psychological problem of feeling more pain seeing the market value of what we own fall drastically from $100k to $50k. You might say you are ready for it, but nothing prepares you from the actual ordeal. 8 out of 10 of those long term investors who believe they can take large 50% volatility swings will be cutting losses. Many will exit the game all together. Conversely, it makes you feel like a god when you see a drastic tripling of the market value of your holdings, you start thinking whether the market is overvalued and you should be ......