Portfolio goals

Welcome back to our “ABCs of Behavioral Biases.” Today, we’ll get started by introducing you to four self-inflicted biases that knock a number of investors off-course: anchoring, blind spot, confirmation and familiarity bias.

ANCHORING BIAS

By now, you’ve probably heard the news: Your own behavioral biases are often the greatest threat to your financial well-being. As investors, we leap before we look. We stay when we should go. We cringe at the very risks that are expected to generate our greatest rewards.

It will soon be the 10-year anniversary of when, in early October 2007, the S&P 500 Index hit what was its highest point before losing more than half its value over the next year and a half during the global financial crisis.

Whether you call Houston and its surroundings home, or you’ve never been there before, it’s hard to watch the unfolding news coming out of Texas and not feel a shared anguish at the state-wide devastation being wrought by Hurricane Harvey.

If you enjoy fine literature, we recommend all of Warren Buffett’s annual Berkshire Hathaway shareholder letters, dating back to 1965. While financial reports are rarely the stuff from which dreams are made, Buffett’s way with words never ceases to impress. His most recent 2016 letter was no exception, including this powerful insight about market downturns:

by Ben Carlson

Welcome to our final installment in Desmond Wealth Management’s Evidence-Based Investment Insights: Bringing the Evidence Home. We hope you’ve enjoyed reading our series as much as we’ve enjoyed sharing it with you. Here are the key take-home messages from each installment:

How many new ways are there for the same old market forecasters to twist a timeless truth: None of us has any idea what the markets will do next.

Consider the following quote from a recent Wall Street Journal article entitled, “Global Stocks Post Strongest First Half in Years, Worrying Investors.”

Welcome to the next installment in our series of Desmond Wealth Management’s Evidence-Based Investment Insights: What Has Evidence-Based Investing Done for Me Lately?

Welcome to the next installment in our series of Desmond Wealth Management’s Evidence-Based Investment Insights: Factors That Figure in Your Evidence-Based Portfolio.