Illusion of Control

illusion of control
How much control do we really have over the events in our lives? For example, how many times have we left for work with ample time to allow for traffic yet an accident occurs on the highway and we end up nevertheless being late? Illusion of control is the tendency to believe that we can […]
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Sizing Implications – Destructive Decisions

overconfidence
One behavior that can destroy investment results and ruin months, and maybe even years, of hard work, is destructive sizing decisions. Imagine you have a game plan on a stock that is currently trading at $100. You buy-in and it immediately drops to 90 dollars. Being the shrewd investor you are, you see the “bargain” […]
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Regret Aversion vs. FOMO

Regret Aversion vs FOMO
Regret aversion deals with a fear of an unfavorable outcome, oftentimes leading to inaction.  FOMO is the ‘fear of missing out’ on a favorable outcome, oftentimes spurring rash action.  Both can impact your risk profile (not to mention, the returns in your portfolio). A group of elders at a hospice were once asked at the […]
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Traits Linked to Going Broke in Retirement

Traits Linked to Going Broke in Retirement
Traits Linked to Going Broke Are you creative, curious, and sympathetic? It turns out that you are more likely to go broke in retirement. According to Catey Hill, studies show that there is a direct relationship between personality traits and how fast folks blow through their retirement savings. The main reason being that many of […]
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Loss Aversion

Loss Aversion
Loss aversion defines peoples’ tendencies to prefer avoiding losses over acquiring gains. It explains the behavior that people will choose to stay where they are and not expand their financial gains if there is a risk of losing the initial amount.
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Gambler’s Fallacy

Shep playing roulette
The Gambler’s Fallacy - aptly named due to its prevalence in the casino scene - is an important concept for everyone, especially investors, to understand and avoid
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