Last week we looked at four types of “stinking thinking,” cognitive biases that can contribute to poor investment decisions. Here are six more. Monte Carlo Fallacy. This is placing too much emphasis on the likelihood of an event happening, just because it...
“I reject your reality and substitute my own.” As youngsters, my kids used to quote this line from host Adam Savage of Mythbusters, one of their favorite TV shows. While he was being humorous, he was also describing the human condition. Regardless of the...
Watch this video on YouTube In December, the Federal Reserve raised the federal-funds lending rate by .25%, only the second increase in the past decade. The day the rate hike was announced I received several calls from journalists, all wanting to know what this means...
Watch this video on YouTube The first week of January 2016 I talked with a retired man in need of some retirement planning. He had a portfolio of about $1,000,000 invested in money market and certificates of deposit. His Social Security income was about $25,000 and...
Watch this video on YouTube “If I only had a crystal ball.” Every investor has probably made this wish from time to time. We would all like a way to avoid the emotional pain and anxiety that are sure to come when our portfolios lose value due to inevitable...
