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Tag: investing behavior

The Risk of Anchoring Investment Expectations to a Market High

Imagine that you have placed your retirement funds in a diversified portfolio which includes a portion in the stock market. A year after your initial investment, the news is buzzing with stories about record-breaking market highs. Seeing the value of your portfolio...

More Cognitive Biases That Can Cost You Money

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...

Four Investing Cognitive Biases To Avoid

“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...

What To Expect From Rising Interest Rates

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...

Feelings Are Normal, But Not Reliable Investment Guides

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...