FLBC 009: Understanding the Psychology Behind Investing

Podcast Details:

Podcast Title:  Understanding the Psychology Behind Investing
Podcast Series: Financial Literacy Boot Camp

Full Illustrations available on YouTube Version here.

Questions/Issues We’ll Address on this Episode:

  1. What is up with the psychology behind investing? Looking at the numbers any rationale person would avoid destructive behaviors right?
  2.  What is the difference between active and passive investment management?
  3. What has taken place with investors and their behavior?- DALBAR Quantitative Analysis of Investor Behavior sites that between January 1, 1985 to December 31, 2014::
    – equity mutual fund investors underperformed the S&P 500 (the equity market proxy) by 8.19% (13.69% vs. 5.5%)
    – fixed income mutual fund investors underperformed the Barclays (the bond market proxy) by 4.81% (5.97% vs. 1.16%)- Parting Thought: What if instead of trying to outperform the market to create wealth, you instead looked at the market as a way to preserve the wealth you are creating through your income?

Helpful Links:
Dalbar report
S&P 500 index
Barclays index
CFA Institute

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Bio:

Dominique is owner of DJH Capital Management, LLC. a full service, comprehensive financial planning firm helping individuals build roadmaps to reach their financial dreams.

© 2016 DJH Capital Management, LLC.

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Author: The Maven of Financial Literacy

Dominique is owner of DJH Capital Management, LLC. a full service, comprehensive financial planning firm helping individuals build roadmaps to reach their financial dreams.