The stress of today’s falling stock market is palpable, and investors need to understand the havoc it can wreak on the human brain. This according to a recent article by…
Tag: Investor Behavior
Active Investors’ Mental Mistakes
Many amateur investors stick to active strategies, even when the evidence shows that “it’s more than likely to be a fool’s errand,” because we allow mental shortcuts to lead us…
How to Be Like Warren Buffett in Times Like These
“When fear defines financial markets, remember Warren Buffett,” says a recent Barron’s article. Buffett once asserted that the secret to beating the market was to “be fearful when others are…
The Danger of Overscrutinizing Out of Favor Investment Metrics
By Jack Forehand (@practicalquant) — No investing factor has been maligned more than the Price/Book in recent years. In a period where value in general has performed very poorly, the Price/Book…
How to Fight These Four Behavioral Biases
The biggest investing risks are born of human decision-making, according to a recent CFA Institute article that outlines behavioral biases and how to combat them. “Biology encourages our brains to…
Survey: How the Financial Crisis Changed Investor Behavior
The AAII Journal recently reported on a survey it conducted to evaluate what lasting impact the 2007-2009 financial crisis has had on its members’ investing decisions. Here are highlights of…
Individual Investors May Not Be "Dumb Money" After All
In a recent article for The Wall Street Journal, columnist Jason Zweig writes, “Bit by bit, the myth of the ‘dumb money’ is dying.” Although Wall Street has long characterized…
The Damaging Role of Biases in Investing
By Jack Forehand (@practicalquant) There are so many biases that can hurt your returns in investing that it is hard to keep track of them. There is also no shortage…
Rush Hour Traffic and Market Corrections
An article in CFA Institute highlights a “disappointing” statistic from a Gallup survey: “31% of investors would prefer to sit in gridlock than rebalance their portfolios,” and argues that “systematic…
Swedroe Offers Perspective to Panicky Investors
In an article for last month’s ETF.com, BAM Alliance director of research Larry Swedroe offered some insight on how to weather potential market volatility using a balanced view of the…