Get Started
Fee-Only, Fiduciaries | 100% Virtual Financial Advisors
  • Home
  • Services
  • Why Us
  • Blog
  • Contact Us
  • Get Started
  • Client Portal
  • Menu

How to avoid three of the worst behavioral mistakes investors can make

October 13, 2020/in Behavioral Finance, Economy, Election, Financial Planning, Investments, Recession /by admin

Hi, I’m Jamie Lima with Woodson Wealth Management, and I’m going to teach you how to avoid three of the worst behavioral mistakes investors can make.

Humans are complicated, irrational beings and we’ve learned that our mindset and behaviors can have a massive impact on our financial outcomes.

Our brains are hardwired with psychological biases that can hurt us as investors, especially right now, when we’re experiencing an economic crisis and volatile markets.

Here are 3 of the biggies and what you can do about them:

One: Action Bias. Humans are primed for action. It makes us feel in control, especially in uncertain times. However, sometimes, immediate action is the wrong move, especially when it’s driven by emotional reactions or gut decisions. Fight action bias by taking time to engage the rational part of your brain and getting advice before making a move.

wo: Recency Effect. We tend to remember recent events more clearly, so we give them more weight when making decisions than past or potential future events. While market losses hurt, we can’t let them derail our goals or keep us on the sidelines. If you’re feeling burned by the correction, reach out so I can help put things into perspective.

Three: Warren Buffett’s Favorite: Confirmation Bias: We love being right and hate being wrong. So much so that our brain tricks us by being more receptive to information that confirms what we already believe and resistant to conflicting evidence. Counteract this by getting an outside perspective and creating systems to make logical decisions.

Buffett has Charlie Munger to talk ideas with, and you’ve got me. The truth is, we all have biases, even as professionals.

But, by learning about how our brains work, we can leverage our behavior and create systems that help us remove bias and create better financial outcomes. That’s why understanding the behavioral side of money and investing is so important.

If you have a question about what I’ve discussed with you or you’d like to speak to me personally, please use the form below to send me a message. I’m here for you.

#cfp #feeonly #financialplanner #sandiegofinancialplanners #sandiegofinancialplanner #bestsandiegofinancialplanner #fiduciary #wealthmanager #bestfinancialadvisoryfirms

Tags: Behavioral Finance, cfp, economy, feeonly, financial planner, financial planning, investments, recession, stock market
Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share on Tumblr
  • Share on Vk
  • Share on Reddit
  • Share by Mail
https://woodsonwm.com/wp-content/uploads/2020/07/logow.png 0 0 admin https://woodsonwm.com/wp-content/uploads/2020/07/logow.png admin2020-10-13 00:20:252020-10-20 22:17:32How to avoid three of the worst behavioral mistakes investors can make
You might also like
Jamie Lima Launches the Emerging Millionaire Method™
How to Maintain Resilience when Facing a (Financial) Crisis
Do You Have Enough Insurance, or Too Much? Find out here.
Here are 5 expenses you can give a (socially-distant) kiss goodbye to this year due to the 'vid.
What'll happen with the outcome of the election?
Fight with your desires for a debt-free life
Now That We've Taken a Deep Breath, Here's a Reminder About Presidential Elections & the Stock Market
WWM In the News: Advisors Face Retirement Income Literacy Gaps Among Clients [WealthManagement.com]

Recent Posts

  • Hindsight Is 2020: 7 Ways We Should All Vow to Treat Our Money Differently in 2021
  • Does Impeachment Impact the Markets? A Quick Historical Look At Past Proceedings
  • Millionaire & Former Zappos CEO Died in November Without a Will. Here are 3 Key Reasons why You Need One
  • Make 2021 less stressful with these financial moves
  • Inauguration Day Is Coming: What Financial Challenges Could High Earners Face During the Biden Administration?

Categories

Archives

  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020

Follow us on Facebook

Woodson Wealth Management is a fee-only, financial advisory firm dedicated to helping you continue to do what you love to do with ZERO financial stress.
Home
Services
Why Us
Contact Us
Privacy Policy
Website Disclosure
Firm ADV
 Email us: info@woodsonwm.com
 Call or text: 858-923-4500
 Ready?: Schedule A Call

© 2020 Woodson Wealth Management and Consulting, Inc. All rights reserved.

First-Ever Wealth Tax Proposed in California: What California Residents Need... Cryptocurrency, COVID and Economic Uncertainty: Here’s Where Things Stand...
Scroll to top