- First impressions matter; whether we like it or not, they guide our behavior and impact our decisions.
- Primacy Bias is the notion that we often overemphasize initial events over longer-term averages when making decisions about uncertain future events.
- When investing, the best way to combat these types of behavioral distortions is to conduct a complete (beginning, middle, and end), analysis of one’s investment performance.
Continue reading “Behavioral Finance 101 (Part 3)”
- Irrational behavior, although common, can degrade investment returns over time.
- In order to invest wisely, it’s important to understand where investors often get tripped up.
- Recency Bias is the notion that we often overemphasize recent events over longer-term averages when making decisions about uncertain future events.
Continue reading “Behavioral Finance 101 (Part 2)”
- Assuming a 7.2% annualized real return (including reinvested dividends), an investment will double in value about every 10 years following the rule of 72.
- However, even with more modest assumptions significant wealth can be generated over time.
Continue reading “Why Invest Forever? (Part 8)”
- The rich continue to get richer, where the top 26 richest humans now control more wealth than the bottom 50%, based upon recent research from Oxfam.
- Wealth has the capacity to grow exponentially after reaching a tipping-point, which can lead to a strong concentration of wealth among a small percentage of owners.
- If you can’t beat ’em, join ’em.
Continue reading “Why Invest Forever? (Part 7)”