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The underlying theme of the stock market and the way it functions is that we are all rational actors in a rational world, acting on the very same publicly available information at the very same time. But the reality is that we are all irrational beings, living in an irrational world. We frequently do things that are against our best interests, such as selling off stocks during market crashes or worrying about cutting our spending only when we have plenty of money.
In this episode, Malcolm Ethridge is joined by Daniel Crosby, Chief Behavioral Officer at Orion Advisor Solutions, to discuss the ways our emotions often hurt us when it comes to managing our personal finances. Daniel and Malcolm discuss various techniques to protect yourself from acting on your impulses in times of financial stress, as well as their take on the true value financial advisors offer their clients in helping them to generate long term wealth.
Daniel Crosby discusses:
- Recency bias and how it can affect our decision making as investors
- Financial life hacks designed to help you avoid your emotional impulses
- The role that extreme loneliness plays in our decision making process
- The importance of financial advisors and their value to clients beyond investment management
- And more
Related: Common Tax Pitfalls to Avoid When Managing Your Equity