As humans, we may react emotionally to portfolio volatility, changes in career, or world events. We often feel insecure or out of control during these moments. Feeling secure, particularly financially secure, is just that—feelings. As we encounter these moments of feeling insecure, it is important to think it through: Why do I feel this way? What would make me feel better? How should I react? And then pause before reacting to reflect. Recently, my spouse and I ... [Continue Reading]
Articles and resources related to Behavioral Investing.
Carl Richards is a fellow financial planner whose notoriously creative napkin sketch drawings help simplify complex personal finance concepts. Richards, also known as "the sketch guy," has been penning columns for the New York Times for a decade, and is the author of two books, The Behavior Gap and The One-Page Financial Plan. In Your 5-Step Guide to Navigating a Scary Stock Market, Richards provides useful and timely advice for us all by highlighting a number of key sketches. He does a ... [Continue Reading]
Our emotions affect our investment decision making in countless ways, which can have a very real impact on our long-term financial goals. One of the most powerful ways our emotions affect us is through our appetite for risk. When markets are calm and returns have been positive, our brain tells us that it’s okay to take on more risk in hopes of achieving higher rates of returns. The opposite is true as well. When markets become volatile and returns have been negative, our brain tells us to take ... [Continue Reading]