June 22, 2018—I continue today with my periodic review of investors’ most dangerous instinct-driven biases. Since I’ve just returned from a CPA conference in distant Las Vegas, I thought I’d celebrate by covering familiarity bias.
June 8, 2018—Which are riskier: stocks or bonds? How about sharks vs. cows? The answers may seem obvious. But what if you’re standing in a field, and a herd of startled cows is stampeding your way? Suddenly those sharks don’t seem like such a threat.
May 11, 2018—Plain and simple: If a financial professional is offering you advice about your money, shouldn’t it always be in your best interest? We think so, and have long advocated accordingly. Unfortunately, as of April 30th, big-broker “Goliath” firms scored another victory that continues to suggest otherwise.
April 13,2018—A few articles ago, I introduced the field of behavioral finance, and the threats investors face if they ignore the emotional, instinct-driven side of money management. I promised to follow up with some of the specific biases that impact otherwise rational investors … like recency. It’s a good one to recognize if you’re wondering what to make of recent increases in market volatility.
March 30, 2018—My favorite annual sporting event is the NCAA Men’s Basketball Tournament. I’m writing this during the first weekend and, wow, what a truly mad season it’s been so far. #13 Buffalo beat #4 Arizona, play-in Syracuse beat #3 Michigan State, and Texas A&M beat #2 UNC. Then, in an upset for the history books, the University of Maryland, Baltimore County (UMBC) Retrievers trounced UVA, the #1 team in the country. Never has a #16 underdog beat a #1 seed in the men’s tournament … by 20 points, no less!
March 16, 2018—It’s a fact of life: Not all financial “advisors” are created equally. Regulators may do their best to protect you from the sheep-cloaked wolves of Wall Street, but “buyer beware” remains my advice.
March 2, 2018—As a seasoned advisor with a long list of financial credentials, I’d probably be pegged by most people as a “numbers guy.” It’s true, I am quite fond of charts and spreadsheets. But any advisor worth his (or her) salt quickly learns numbers alone aren’t enough to get the job done. We also must be well-versed in behavioral finance, i.e., the many threats investors face from the emotional, instinct-driven side of money management.
