111. How to Manage Investor Misperceptions and Behavior Biases

Jul 7, 2022

Are You Making Emotional Decisions Impacting Your Retirement Plan?

Many of us are desperate to get back to normalcy, especially because of what we’ve experienced over the past two years. But the market seems to keep reminding us that everything isn’t exactly normal and unfortunately, we’ve been in correction mode all year long. On today’s episode, we’ll break down a recent article that explores investor misperceptions, behavior biases, and how these factors hurt our portfolios, especially in times like these.  

Loss aversion bias probably harms investors the most, losses hurt your plan twice as much as gains help your plan. This can trigger other behavioral biases, such as the reluctance to sell an investment if it’s trading below the original purchase price. Emotional decision making can be one of the most dangerous factors posed against growth in your retirement plan. So, join us today as we explore emotional decision making, selling at a loss, things you need to avoid doing during market corrections, and much more.  

The article mentioned in today’s show: https://blairbellecurve.com/get-even-itis/ 

Redefining Wealth® Custom Income Plan: https://redefiningwealth.info/schedule/

Rate, Review and Subscribe to the Podcast:

https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188

How to Connect:

redefiningwealth.info

lswealthmanagement.com

Schedule a Review: https://redefiningwealth.info/schedule/ 

Timestamps (show notes):

0:13 – Welcome to episode 111!

4:02 – Trading below the original price 

7:23 – Don’t get emotionally attached 

10:59 – Holding on for the wrong reason 

16:35 – The things you shouldn’t be doing 

20:53 – Follow the index and buy cheap 

24:06 – Timing the market 

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