FLBC 015: Making Better Financial Decisions-Part 2
Full Illustrations available on YouTube Version here.
Questions/Issues We’ll Address on this Episode:
– Introduction to the Idea of what biases are and why our brains get in the way of good financial decision making.
– Cognitive Bias (Head) – mental misfire
– Emotional Bias (Heart) – avoid pain, produce pleasure “fight or flight”
Loss Aversion Bias – you want to avoid the loss
Examples: Not selling a losing stock in your portfolio because you’re emotionally tied to it…it represents something.
Confirmation Bias – This is the view that people generally look to confirm what they already believe about something ignoring evidence to the contrary.
Examples: holding too much employer stock in your retirement plan
Where to Find Us:
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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