I spend a lot of my time writing about the common mistakes made by investors because I operate under the assumption that cutting down on unforced errors could drastically improve portfolio performance for the majority of investors. The behavior gap between reported fund returns and actual investor returns that results from poorly timed purchases and sales…
Search Results for: "behavior"
Should Fund Managers Care About the Behavior Gap?
In their book, Quantitative Value, authors Tobias Carlisle and Wes Gray discuss the importance of creating an investment process that systematically reduces irrational behavior. Intelligent people are constantly looking for ways to minimize their own weaknesses. Automating good decisions is one of the best ways to pull this off. There was one example in the book…
Why Willpower Alone Isn’t Enough to Change Your Behavior
“You have to build systems to protect against your lesser self.” – Tim Ferriss I’m a big fan of the new Tim Ferriss podcast. He interviews successful people from a wide range of backgrounds and shares interesting productivity and process improvements. His latest with author Neil Strauss is the best one I’ve listened to yet….
How Interest Rates Affect the Behavior Gap
“At any given moment, what the market is doing reflects how we’re feeling right NOW. Not how we’ll feel tomorrow and most likely not how we’ll feel in a month, let alone a year. Short-term market behavior is rarely about anything other than an interpretation of what we THINK is happening or will happen as…
Buffett’s Fourth Law of Motion: Your Behavior
“The investor’s chief problem – and even his worst enemy – is likely to be himself.” – Benjamin Graham
James Montier’s Lessons on Behavioral Investing
“We will learn an enormous amount in the short term, quite a bit in the medium term and absolutely nothing in the long term. That would be the historical precedent.” – Jeremy Grantham (1) A bat and a ball together cost $1.10 in total. The bat costs a dollar more than the ball. How much…
A Behavioral Approach to Reduce Your Debt
“The key to happiness is low overhead and no debt.” – Lynda Barry Since average credit card rates are much higher than average financial market returns, taking on more debt is an easy route to creating a negative net worth. There are many strategies focused on saving more but not a whole lot gets written…
Lessons From The Behavior Gap
“Investment mistakes are investor mistakes.” – Carl Richards The Behavior Gap by Carl Richards is one of the best personal finance books I have read. And there is not a single specific investment idea in the entire book. No secret stock picking formula or perfect asset allocation by age and net worth. Instead, this book…
An Epic Bull Market
This is shaping up to be one of the greatest bull markets of all-time.
My Career Path
“What do you want to do?” “I want to work in a cool job with cool people.” “OK…doing what exactly?” “um…well…I mean…” This was a conversation that occurred in my senior year of college with the guidance counselor. I knew I wanted to work in finance in some capacity because I liked numbers, but beyond…
