Behavioral Biases – Part III

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We’re coming in for a landing on our alphabetic run-down of behavioral biases. We’ll wrap our series, the ABCs of Behavioral Biases, by repeating our initial premise: Your own behavioral biases are often the greatest threat to your financial well-being. Exhibit 1, attached, is a helpful summary of the biases we’ve covered throughout this series. Today, we’ll present the final line-up: ...

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Behavioral Biases (Part II)

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Let’s continue our alphabetic tour of common behavioral biases that distract otherwise rational investors from making best choices about their wealth. There are so many investment-impacting behavioral biases, we could probably identify at least one for nearly every letter in the alphabet. As Warren Buffett has famously said, “Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should ...

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Introduction to Behavioral Biases (Part 1)

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Our own behavioral biases are often the greatest threat to our financial well-being. As investors, we leap before we look. We stay when we should go. We cringe at the very risks that are expected to generate our greatest rewards. All the while, we rush into nearly every move, only to fret and regret them long after the deed is done. ...

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Are You Prepared for the Next Market Correction?

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If you enjoy a good read, we recommend Warren Buffett’s annual Berkshire Hathaway shareholder letters, dating back to 1965. While financial reports are rarely the stuff from which dreams are made, Buffett’s way with words never ceases to impress. His most recent 2016 letter was no exception, including this powerful insight about market downturns:

“During such scary periods, you should never forget two things: First, widespread fear is your friend as an ...

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Post Election Day Thoughts

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election-2016After last night’s “media surprise” whether you’re feeling elated, deflated or mostly just jaded about the Election we wanted to reach out to you with a few thoughts related to the “What’s next?”. To say the least, there are more than enough political analyses available from even a single Google search, so we won’t enter into that fray ourselves.

With respect to your investments, here’s a quick ...

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Tax Loss Harvesting: Opportunities and Obstacles

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lemon-picking  So much of investing is beyond our control (picking stock prices, timing market movements and so on), it’s nice to know that there are still a number of “power tools” we can employ to potentially enhance your bottom line. Tax-loss harvesting is one such instrument … although the analogy holds true in a couple of other ways: It’s best used skillfully, ...

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Brexit Fears and the Capital Markets

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brexit

As a kid in school we learned the “sun never sets on the British empire”; fast forward this coming week we await a Brexit vote for secession from the European Union (EU). The opinion polls show a slight edge to the British exit while the bookies favor continued membership. While no one knows how the vote will turn out one of our ...

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Survivorship Bias

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statistical liesAs the famous quote by Prime Minister Benjamin Disraeli states:  “There are three kinds of lies – lies, damned lies, and statistics”. In this installment of Financial TIPs we will focus on the third type of “lie”, statistics. One trick of the trade we must watch for when accepting or rejecting a performance analysis is survivorship bias; using statistics to mislead.

What ...

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