Behavior: Evidence-Based Investing Insights Part 4 of 4

DimensionalEvidence-Based investing comes from a compilation over more than a half century of many independent peer reviewed research results of how markets work. There are 12 key insights in this 4 part video series.

Here are the last two insights in this 5:47 video on behavior:

11. The human factor is the most important of all the factors. YOU are only human! Our basic instincts cause more harm than good while investing.

12. There are a wide range of biases causing us to react irrationally (why the evidence based approach is designed to counter them). What are 6 common biases? (There are many more).

 

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PS. In the interest of disclosure: I do use DFA sub-managed SA Funds with most clients (not a fund requirement, but a business decision I’ve made). Analogies that explain the difference between investing and planning (Yes, they are different)! :

This blog is not a solicitation; simply an explanation of the basic philosophy and approach.

Note: The video was produced by a different advisory firm – not Better Financial Education. The video describes the basic factors pioneered by Dimensional and many others which Better Financial Education also applies.

About Larry Frank, Sr.

Larry R Frank Sr., MBA, CFP®, is an experienced financial advisor and a published author on Retirement Planning Research. Have a financial question? Click Here to Ask Larry

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