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."

8 Behaviors to Avoid

Over Diversification

Over Diversification

By owning everything...you own nothing

Under Diversification

Under Diversification

Owning just one idea

Euphoria

Euphoria

The herd mentality

Panic

Panic

Fear of a temporary decline

Speculation

Speculation

Or more accurately stated -- Speculating when you think you are investing

Believing this time is different

Believing this time is different

Not understanding the difference between Volatility and Risk

Timing and Selection

Timing and Selection

When to be in or out of the market. What investment to own for today

Asset class confusion

Asset class confusion

Investing for Current Yield vs. Total Return

Wisdom of Great Investors

Successful investors throughout history have understood that building long-term wealth requires the ability to control emotions and avoid self-destructive behavior.

  1. 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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  2. 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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  3. 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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  4. 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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  5. 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
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  6. 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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  7. 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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  8. 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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  9. 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.

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