Investing Behaviors That Will Wreck Your Financial Plan

<p>What are some of the behavioral tendencies we all can run into that affect our decision-making, and ultimately cause some big mistakes? What do big areas or behavioral tendencies look like?</p> <p>In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks about investing behaviors that will wreck your financial plan. Knowledge and awareness are needed to avoid behavioral finance mistakes.</p> <h3><strong>Topics Discussed:</strong></h3> <ul> <li>What is behavioral finance? When people make errors, mistakes, and biases</li> <li>Why? People are not rational or self-controlled and don&rsquo;t identify tendencies</li> <li>Overconfidence: Common idea that you know more than you actually do</li> <li>Self-serving Bias: Attribute good things/outcomes to skill, bad outcomes to luck</li> <li>Hindsight Bias: You know more or knew more than you really did in the past</li> <li>Confirmation Bias: Focus on what confirms beliefs, ignore what contradicts them</li> <li>Recency Bias: Hone in on short-term and overemphasizes that importance</li> <li>Refer to your financial plan and remind yourself of your financial goals</li> <li>Anchoring Bias: Relying and latching onto too much pre-existing info</li> <li>Loss Aversion: Overly fearful of losses and pull to avoid losses</li> <li>Herd Mentality: Suffer from fear of missing out (FOMO)?</li> </ul> <h3><strong>Links:</strong></h3> <p><a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2146864">Confirming Fund Managers Overconfidence - SSRN</a></p> <p><a href="https://www.schwabassetmanagement.com/section/behavioral-finance">Behavioral Finance - Charles Schwab Asset Management</a></p> <p><a href="https://financeforphysicians.co/2022/08/18/what-to-do-when-your-investments-start-tanking/">What To Do When Your Investments Start Tanking</a></p> <p><a href="https://financeforphysicians.co/2022/08/25/how-market-downturns-look-and-feel/">How Market Downturns Look and Feel</a></p> <p><a href="https://financeforphysicians.co/2022/06/23/the-power-of-