The Hindsight Trap: How to Avoid the Pitfalls of Overconfidence in Investing
Everyone in finance is Nostradamus. The uptick in inflation was obvious. The bear market was so predictable. It was clear that ABC Co. stock was going higher. There's only one problem with those three statements - they aren't true. Yet, when market pundits discuss past events, they describe them as inevitable. That's why hindsight bias is also called the "knew-it-all-along" effect.
Contemplating the Sage: Applying Stoic Principles to Investment Decision-Making
In many ways investing is a microcosm of life; the same traits and behaviors that benefit investors also aid people in other areas of life. Thus, even if you don’t consider yourself a Stoic, you may find their techniques helpful when you encounter financial challenges — like managing the stress of a bear market.
From Blue Skies to Stormy Waters: Five Red Flags for Long-Term Investors
Mixed messages confuse investors already battling human nature, which has evolved to make long-term investing challenging. Market corrections and bear markets can be excellent opportunities for long-term investors, but how do you know when to keep buying specific stocks or sell?
Here are five red flags that would cause me to do extra digging.
Unlocking Opportunities: Actionable Steps for Investors in a Bear Market
It's officially official. The S&P is in bear market territory, having crossed the arbitrary line in the sand. Pundits can now move on from "is a bear market coming" to "how bad will it be" and "how long will it last."
If this is your first bear market, it won't be your last, so pay special attention to how you feel, act, think, and cope
Unleashing the Power of the Subconscious Mind: Lessons from Arnold Van Den Berg
Arnold Van Den Berg survived the Holocaust but was left angry, confused, and depressed. His parents miraculously survived Auschwitz, but his early years were filled with angst. A damaged young man emerged from the war, but Arnold recovered to become a top-class money manager by learning to control his mind - a true rags to riches story.
Understanding the Price of Volatility: How to Find Peace in Turbulent Times
Everything has a price. We're used to it by now. We live in one of the most capitalistic countries on earth, during the most prosperous time in human history. We're conditioned to think about goods and experiences in terms of dollars and cents. Perhaps that's why market volatility is such a challenging concept.
Unlocking the Magic of Compounding: Why 'Later' is Your Biggest Enemy
One word can change the course of your financial history - "later."
That single word can doom even the most well-intended personal finance goals. I've talked to very rich people, and I've spoken with poor people, and without a doubt, the number one regret most people have when it comes to financing is waiting until "later."
The Legacy of T. Rowe Price: Lessons in Independent Thinking and Growth Investing
Thomas (T.) Rowe Price is an OG of growth investing, along with Philip Fischer and others who would sit atop the Mount Rushmore of growth investing. He's most known as the namesake for the legendary Baltimore-based financial company, but his investing prowess and independent thinking impress me most.
Unmasking Weasel Words: Politicians and Financial Experts Use of Transitory
Weasel words sound consequential but only communicate something vague. Politicians love weasel words. They use them to answer simple questions with long-drawn-out answers, using poetic language and passionate displays while saying little meaning or value.
I felt it'd be appropriate to look at a new favorite weasel word of mine, or least favorite, depending on how you look at it (perspective matters, as you'll see below).
Optionality: The Key to Antifragile Investing in the Tech Age
The world promised us jet packs, flying cars, disintegration, and hoverboards (that actually hover). Instead, all we got was 24/7 access to work emails, distorted views of reality from social media, and fake news. That's how some people see the state of innovation. While not entirely wrong, that's a very pessimistic view and demonstrates how poorly we predict the future.
Investing Through Geopolitical Storms: How to Remain Disciplined Amid Global Conflicts
Investors are a tough bunch. We have to face crisis after crisis, some real and some sensationalized by our paid-to-scare media. Staying disciplined when emotions run high and fear triggers the evolutionary developed fight or flight mechanism is challenging.
The Modern Advisor's Dilemma: Why Investment Discussions Are Being Neglected
The modern advisor is expanding their services, offering more comprehensive financial planning in addition to classic portfolio management and investment brokerage services. But something else has happened; many advisors have significantly reduced and, in some cases, eliminated the focus on investing.
The Conflict: Investment Success and the Battle of Inner Personalities
I was reminded of the story of the two wolves when I read a quote by Wall Street Journal columnist Jason Zweig. When asked the secret to investment success, he answered:
“Within you lurk an angel, a devil, a scholar, and an idiot. If the angel and the scholar ever let their guard down, the devil and the idiot will wreak havoc that will take years of work to undo.”
Zoom Out for Perspective: Thriving Amidst Market Corrections
When you look at your investment account, does your stomach feel like you've eaten a tainted meal? Even seasoned investors sometimes get that queasy feeling as they watch their portfolio balances decline. I imagine this is part of the human condition inherited from ancient times of survival in a world with far more significant risks and fewer resources. Fight or flight.
Atomic Habits: Unleashing Financial Success through Small Changes
The Atomic Habits methodology starts with the premise that "success is the product of daily habits - not once-in-a-lifetime transformations." This doesn't jive with gurus who preach overnight life-altering changes, but it makes a lot of sense.
Clear didn't' explicitly write atomic Habits about personal finance, but the same ideas that help people create habits in other areas of life can help you reach your financial goals.
Anchoring Bias: The Hidden Weight on Your Investment Decisions
Any good boat captain knows the importance of a quality anchor. The earliest water navigators probably struggled with drift much like we do, minus the Yeti coolers of adult beverages. Not to be deterred, these early skippers likely took a heavy rock, tied it to thin tree branches, and created the first anchor. Hundreds of generations of intoxicated lake goers owe a debt of gratitude.
More recently, economists used the anchor to describe a cognitive bias that impacts investor decision-making.
Defining Your Path: Powerful Questions for Financial Independence
If you turn on almost any financial news network, you'll see something that looks straight out of The Matrix. Numbers and symbols, charts, and tables. It'd be easy to conclude that data and metrics are the most important investing elements. But they aren't - YOU ARE!
FIRE Extinguished?: Avoiding Burnout on the Path to Financial Independence
As a financial advisor, the FIRE movement is attractive. It's built on the foundation of delayed gratification, the most critical attribute to overall happiness, in my opinion.
Extreme savings and investing define the movement. And while attaining financial independence is a worthy goal, one shouldn't pursue it so ferociously that they sacrifice the present.
The Insights of the Planning Process: More Than Just a Financial Plan
Financial planning is important, but don't get too caught up in the resulting plan, it's going to change. Embrace the process of thinking about your future but don't expect it to stay on script. Be optimistic and steady, and finances can be empowering not anxiety-inducing.
Inflation: The Scary Headlines and the Real Story
The spooky season may be over, but scary headlines about inflation are still frightening investors. There's always something to "worry" about regarding the markets and investing, and inflation is the trendy topic today. But should we worry about inflation? Is it coming? And will it last?