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

Loss Aversion

Expecting to find high returns with low risk

Narrow Framing

Narrow Framing

Making decisions without considering all implications

Mental Accounting

Mental Accounting

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

Diversification

Diversification

Seeking to reduce risk, but simply using different sources

Anchoring

Anchoring

Relating to the familiar experiences, even when inappropriate

Optimism

Optimism

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

Media Response

Media Response

Tendency to react to news without reasonable examination

Regret

Regret

Treating errors of commission more seriously than errors of omission

Herding

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.

<span>Be Patient and Think Long-Term</span>

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

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<span>Keep Your Emotions in Check</span><ul></ul>

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

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    <span>Disregard Short-Term Forecasts</span>

    Disregard Short-Term Forecasts

    “The function of economic forecasting is to make astrology look respectable.”

    - John Kenneth Galbraith,
    Economist and Author


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    Make a Habit of Investing Regularly

    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

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    Don't Try to Time the Market

    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

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    <span>The Power of Equities</span><ul></ul>

    The Power of Equities

      “History has shown that equities are the best way to build long-term wealth.”

      - Shelby M.C. Davis,
      Legendary Investor

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      <span>Markets Fluctuate. </span><span>Stay the Course.</span>

      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

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      <span>A Market Correction is an Opportunity</span>

      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

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      <span>Equities Have Built Wealth Despite Crises</span><ul></ul>

      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

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        The definitive behavioral investing book: Unpack Your Financial Baggage: How to Battle the Misconceptions of Retirement Planning

        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.

        Our Team's Insights