• Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Retirement Field Guide

Retirement Action Plan

  • About
    • About Ashby
    • Who We Serve
    • Contact Us
    • Disclaimers

The Retirement Field Guide

Home Link

Behavioral Investment Advice

by Ashby Daniels, CFP®

The concept of “behavioral investment advice” is esoteric because, generally speaking, the only people who know the true value of what it can offer to investors are the advisors who have witnessed first hand the value of said advice. Generally speaking, people who believe advisors are a sham or are overpaid or whatever negative connotation they want to attach can’t accept a value proposition that seems completely intangible on the surface. I don’t blame people for this view since Wall Street hasn’t exactly been the beacon of integrity. But there’s more to it than that.

A quote I offered in a recent article bears repeating here. From Rory Sutherland:

“When we do put a name to non-rational behavior, it is usually a word like ’emotion’, which makes it sound like logic’s evil twin. ‘You’re being emotional’ is used as code for ‘you’re being an idiot.’”

Nobody likes to be called an idiot or even perceived to be one.

Yet, a quote hit me in the most recent Howard Marks memo. [Sidenote: I think his memos are some of the best investing commentaries on the internet.] He says,

“When you find an investment with the potential to compound over a long period of time, one of the hardest things is to be patient and maintain your position as long as doing so is warranted on the basis of the prospective return and risk. Investors can easily be moved to sell by news, emotion, the fact that they’ve made a lot of money to date, or the excitement of a new, seemingly more promising idea. When you look at the chart for something that’s gone up and to the right for 20 years, think about all the times a holder would have had to convince himself not to sell.” [emphasis is from Howard Marks]

That last sentence in particular is true of virtually ALL equity investing. Staying invested through the tech bust of the 2000s, the real estate crisis of 2008, 2011 debt ceiling and dollar downgrade, 2013 taper tantrum, 2018 trade war, and most recently, the 2020 COVID pandemic is a tough ask. Despite the difficult investing terrain of the last 20 years, investors who stayed the course were well-rewarded.

But that doesn’t mean it wasn’t extraordinarily difficult for many investors. Surely, there are investors who can do this alone. But I’ll guess there are multiples of that that would benefit greatly from the attention of a high-integrity, empathetic advisor. We can never know when the time will come that an investor feels the emotional pull to permanently alter the trajectory of their wealth accumulation plan, but it seems likely that it will come at some point. These are the points when an empathetic advisor can truly help.

For what it’s worth, this is not meant to be a judgmental piece toward DIY investors. It’s quite the contrary. I’m aware that most of the readers of my corner of the internet are DIY investors. I want to help everyone which is why I continue to write all the positive articles offering historical perspective hoping to help thousands of people I’ll never meet stay the course to reach their financial goals. Hopefully, I’ve been more than clear about that!

But if you’re someone who is tempted to make portfolio changes during each market hiccup, hiring an advisor isn’t giving up, but an act of infusing hope and confidence toward your own future. If that’s you, we have wonderful advisors here in my office and, if you prefer someone local, I know many highly qualified advisors all over the country that would love to help. Feel free to reach out.

To your success,
Ashby


If you liked this post, you can subscribe down below. 👇👇

This post is not advice. Please see additional disclaimers.

Filed Under: General

Primary Sidebar

Search Blog

Categories

Archives

Footer

Join the Retirement Field Guide Newsletter

Subscribe to get our “Preparing for Retirement: Seven Essentials for Successful Investing in Retirement” whitepaper!

We won't send you spam. Ever. Unsubscribe at any time.

  • This field is for validation purposes and should be left unchanged.

Follow us:

LinkedIn

  • 600 Waterfront Dr Suite 125,
    Pittsburgh, PA 15222
  • (412) 742-4861
  • Email Me

Large Map Directions

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Raymond James financial advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered. Therefore, a response to a request for information may be delayed. Please note that not all of the investments and services mentioned are available in every state. Investors outside of the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site. Contact our office for information and availability. Retirement Field Guide and Shorebridge Wealth management are not registered broker/dealers and are independent of Raymond James Financial Services, Inc. member FINRA / SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James Corporate Privacy Notice.
FINRA BrokerCheck

Copyright © 2022, Retirement Field Guide. All Rights Reserved.  |  Privacy Policy  |  Design by Tinyfrog Technologies.

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
ACCEPTREJECT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via , ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT