I've written before about average returns and how they rarely occur. It's great to look at long term market averages, but on a year-to-year basis, those averages should absolutely not be what investors expect. If you invest with the expectation of achieving average...
We fear change. It's a fact. Think about the last time Twitter or Facebook updated its app. How many people initially complained about it? I'm guilty of eating the same thing for breakfast every day, scrambled egg whites with assorted vegetables. Don't even think...
If you've ever eaten at a buffet, you probably know what the naive diversification heuristic is without even realizing it. Let me explain. When I visit a buffet, I end up taking a little bit of everything so I don't miss out on the restaurant's best dish. It always...
"It's okay to be wrong, it's not okay to stay wrong". Maybe you've heard some variation of this saying before? It's one of my favorites, as it applies nicely to all facets of life, especially investing. A common reason many of us decide to "stay wrong", rather than...
As humans, we're all affected by different behavioral biases. We often let emotions dictate our actions, which can lead to unfavorable outcomes. These inherent biases make rational investing a difficult task. The endowment effect is one such bias that works against us...
Ben Carlson of A Wealth of Common Sense has this to say regarding the recent Greek drama: "If you’ve been following the Greek saga from the start you begin to realize that even the experts on the situation are pretty much just making it up as they go. How often do the...
Recency bias is one of many cognitive errors that plague investors. It refers to the human tendency to overemphasize more recent data. The recency bias is most likely to be discussed in the realm of behavioral finance, however this bias can be found in every day life...
If you aren't familiar with Google Trends, I recommend checking it out. This useful tool measures how frequently a term is searched for in Google. Another feature lets you compare search terms to one another and analyze their relative popularity over time. This...
For many investors, their workplace retirement account is the largest nest egg they'll accumulate. Whether your option is a 401k, 403b, or 457, recently the message has become loud and clear: tax-deferred savings are something to take advantage of. If you're...
Happy Stock Market Games, and may the odds be ever in your favor! If you took an investing class in high school or college, you likely played some variation of a stock market game. You know, that game where teams try to obtain the best investment returns over a...
