The ABC’s of behavioral biases: F-H
Let’s continue our alphabetic tour of common behavioral biases that distract otherwise rational investors from making best choices about their wealth. Today, we’ll tackle: fear, framing, greed and herd mentality. FEAR What is it? You know what fear is, but it may be less obvious how it works. As Jason Zweig describes in “Your Money […]
The ABC’s of behavioral biases: A-F
Welcome back to our “ABCs of Behavioral Biases.” Today, we’ll get started by introducing you to four self-inflicted biases that knock a number of investors off-course: anchoring, blind spot, confirmation and familiarity bias. ANCHORING BIAS What is it? Anchoring bias occurs when you fix on or “anchor” your decisions to a reference point, whether or not […]
The ABC’s of behavioral biases: an introduction
By now, you’ve probably heard the news: Your own behavioral biases are often the greatest threat to your financial well-being. As investors, we leap before we look. We stay when we should go. We cringe at the very risks that are expected to generate our greatest rewards. All the while, we rush into nearly every […]
Why Perspective Matters
I often say that one of our primary roles as an advisor is to provide context and perspective for clients, allowing us to collaboratively make better decisions. Behavioral economists have identified narrow framing as the tendency for investors to make decisions without considering the big picture or long-term effect on their portfolio. This behavior can […]
Market Timing – A Losing Game
The stock market crash of 2008-2009 is a very recent memory for many investors who still bear the scars from the experience. At Rockbridge, we also have prospective clients who walk into our offices saying that they haven’t recovered yet from the financial pain their portfolio endured over those several months. Why? It’s usually a […]
Market Commentary- November 2016
Markets in November The campaign is finally over and Donald Trump won. Markets respond to surprises and this result was one. Tuesday night I, along with many others, anticipated a starkly negative response. Yet, most, but not all, stocks went up and have generally stayed there. Domestic small company stocks and value stocks responded big […]
Post-Election Reflections
Whether you find the election results exciting or shocking, we are now faced with the question, “What’s next?” With respect to your investments, here’s a quick reminder of how we feel about that: Ample evidence informs us that it is unwise to alter your long-term investment strategy in reaction to breaking news, no matter how […]
Presidents, Politics and Your Portfolio: Thinking Beyond Stage One
It’s no surprise that this year’s U.S. presidential race has become a subject of conversation around the globe. In “Why Our Social Feeds are Full of Politics,” Canadian digital marketing executive Tara Hunt observes, “American politics, it seems, makes for high-intensity emotions far and wide.” The intensity will probably only increase as the November 8 […]
Before You Retire, Make a Leisure Plan with Purpose
We all know the importance of getting your finances in order and creating a financial plan when you are on the brink of retirement. However, creating a “leisure plan” can be just as important to a successful retirement. This recent USA Today article discusses the significance of planning how you may want to spend your […]
Another Surprise – Yet Again!
The recent vote in Britain to exit the European Union is yet another reminder of how markets often react negatively to surprises. We cannot help but ask ourselves, “Is it different this time? Maybe this is the event that upends markets as we know them, and I would be stupid not to react!” As it […]
