Behavioral Investing
Behavioral Investing
Controlling Emotions & Avoiding Self-Destructive Behavior
"The dominate determinate of long-term, real life investment returns is the behavior of the investor themselves." --- Nick Murray
Behavioral Investing in Practice
As your financial behavioral coach, we guide you during times of both Euphoria and Fear in order for you to make decisions based on your family's long-term financial plan...not today's most recent media manifested "crisis."
9 Behaviors to Avoid

Loss Aversion
Expecting to find high returns with low risk

Narrow Framing
Making decisions without considering all implications

Mental Accounting
Taking undue risk in one area and avoiding rational risk in another

Diversification
Seeking to reduce risk, but simply using different sources

Anchoring
Relating to the familiar experiences, even when inappropriate

Optimism
Belief that good things happen to me and bad things happen to others

Media Response
Tendency to react to news without reasonable examination

Regret
Treating errors of commission more seriously than errors of omission

Herding
Copying the behavior of others even in the face of unfavorable outcomes
Clients trust Melone Private Wealth’s financial planners because they provide peace of mind while protecting and growing wealth
Wisdom of Great Investors: 9 Lessons
Successful investors throughout history have understood that building long-term wealth requires the ability to control emotions and avoid self-destructive behavior.

Be Patient and Think Long-Term
“The stock market is a device to transfer money from the ‘impatient’ to the ‘patient’.”
- Warren Buffett,
Chairman, Berkshire Hathaway

Keep Your Emotions in Check
“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. You need to keep raw irrational emotion under control.”
- Charlie Munger,
Vice-Chairman, Berkshire Hathaway

Disregard Short-Term Forecasts
“The function of economic forecasting is to make astrology look respectable.”
- John Kenneth Galbraith,
Economist and Author

Make a Habit of Investing Regularly
“Systematic investing will pay off ultimately, provided that it is adhered to conscientiously and courageously under all market conditions.”
- Ben Graham,
Father of Value Investing

Don't Try to Time the Market
“Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.”
- Peter Lynch,
Legendary Investor and Author

The Power of Equities
“History has shown that equities are the best way to build long-term wealth.”
- Shelby M.C. Davis,
Legendary Investor

Markets Fluctuate. Stay the Course.
“Individuals who cannot master their emotions are ill-suited to profit from the investment process.”
- Ben Graham,
Father of Value Investing

A Market Correction is an Opportunity
“A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.”
- Warren Buffett,
Chairman, Berkshire Hathaway

Equities Have Built Wealth Despite Crises
“History provides crucial insight regarding market crises: they are inevitable, painful and ultimately surmountable.”
- Shelby M.C. Davis,
Legendary Investor

The definitive behavioral investing book: Unpack Your Financial Baggage: How to Battle the Misconceptions of Retirement Planning
Tens of millions of people are stampeding into retirement on their last major financial run expecting a retirement lifestyle of independence and dignity. Unfortunately, they are following a leader off a financial cliff, due to the traditions and habits that have led to a misunderstanding of long-term planning—not to mention the prehistoric cognitive bias that is tugging at their behavior.