The Challenge of Recency Bias for Investors

In a recent video on the Index Fund Advisors website (IFA.com), behavior expert and author Carl Richards discussed the challenge faced by investors from recency bias—that is, the tendency to focus on events from the recent past and project them into the future. “We’re really good at doing it,” says Richards, adding that it can wreak havoc when the past doesn’t repeat itself as we project it might. He says that the only solution is… Read More

How to Keep Investing Perspective

By John Reese (@guruinvestor) —  “Perspective shifts us from worry to options.” Wise words written by Carl Richards, CFP in his Behavior Gap email last week—and timely given the up-and-down market environment we’re facing. Richards, creator of The New York Times Sketch Guy column, also offered his depiction of how perspective can benefit us: Richards recounts a white-water rafting experience during which, when feeling worry while approaching the rapids, he found comfort in stopping the boat… Read More