Evidence-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)! :
- Investing is the fuel for your plan – it is not the plan itself.
- Investing are the cables that support your bridge which is the plan that gets you where you are to where you want to get to.
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.