It has been well documented that during the Global Financial Crisis (GFC), many individual investors panicked, sold the bulk of their investments and sat in cash waiting to get back into the market. If you asked them, they would tell you they were looking for a “safe” time to get back into the market.
Well, it may not seem like it when we consider that the S&P 500 Index got off to its worst start ever in the first week of the New Year, but we are in one of the longest-running, broadest wealth-producing bull markets in our history. On March 9th of this year, the bull market in U.S.
I share the sketch above with the permission of Carl Richards, a CERTIFIED FINANCIAL PLANNER™ and the director of investor education for the BAM ALLIANCE. As the creator of the weekly “Sketch” Guy column in The New York Times, Richards has a real talent for making complex financial concepts easy to understand.
Daniel Kahneman, the father of behavioral economics and the winner of the 2002 Nobel Prize in economics, recently addressed hundreds of financial professionals at the IMCA 2015 New York Consultants conference in Manhattan.
To answer this question I want to clarify that we are talking about an actual human advisor and not automated financial advice or a “robo advisor.” Also, we’re addressing more that returns.
Unless you are very rare, we all make mistakes. The important thing is that we learn from them. And I thought you might enjoy reading about lessons from some of the most common investment mistakes:
What does market volatility have to do with biology? According to John Coates, former Wall Street trader turned neuroscientist, and author of The Hour between Dog and Wolf, plenty.
Is it really different this time? Fueled by fear or greed, investors have the bad habit of turning their backs on fundamental investment truths when emotions run high.
With the recent drop of the S&P 500 Index the TV’s talking financial heads have begun to ask: Are we wading into a bear market?  Or might the downturn signal the end of a multi-year rally inside a prolonged bear market?
Practice makes perfect. If at first you don’t succeed try try again.