Great Expectations

There is a simple equation for happiness that not everyone quite grasps. Contentment is the difference between expectations and reality. Lower your expectations sufficiently, and almost any experience turns out to be pleasant or at least bearable. But when expectations are too high, there is room for disappointment even if the actual outcome is fine, or even good. This is of course relevant at this time of year when people are making plans for their professional and personal lives, having spent time on the beach or around the campfire engaged in introspection. It is also particularly relevant for financial markets, where the known is priced in immediately, and therefore the surprises cause big moves.

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