MARKET HEADLINES ARE NOT A FINANCIAL PLAN

Posted by Fred Kneib, AIF®
On July 23, 2018

A recent study by Dalbar showed that during the 20-year period ending in 2017, the S&P 500 index averaged a 7.20% annual return while the average equity fund investor captured 5.29% over the same time period1. In the investment world, this 1.91% difference between investment returns and investor returns is called the “behavior gap.” Understandably, […]

INVESTING: EXPECTATIONS VS. REALITY

Posted by Brad Bridgewater
On June 26, 2017

A quick Google search of the phrase “Dow Jones Industrial Average history” yields endless versions of one of the most iconic, and misleading, graphs in modern finance. With a few dips here and there, including the most pronounced one during the Great Depression, the stock market trend shows a steep incline that encompasses more than […]

TEMPORAL DISCOUNTING

Posted by Brad Bridgewater
On June 10, 2017

Carpe diem: seize the day. Many take this to mean they should live in the moment, let go of the past, and let the future worry about itself. In the financial world, this mindset takes the form of temporal discounting. Temporal discounting is the tendency for people to put a greater value on what is happening […]

ARE YOU GAMBLING WITH YOUR INVESTMENTS?

Posted by Brad Bridgewater
On September 30, 2016

Recency bias is one of a long list of behaviors that lead people to make decisions they might not otherwise make after more thought and reflection. Other examples of these biases are groupthink, impact bias, and the gambler’s fallacy. Recency bias is the tendency, based on human nature, to rely heavily on the latest data […]