Get the risk in your portfolio correct, stay disciplined and rebalance. Don't let investor behaviors of fear and greed ruin your returns.
Continue to learn, stay diversified according to your risk tolerance, stay disciplined, and rebalance. Education is your best defense against imprudent investing. Invest intelligently!
Past performance is no guarantee of future results.
This clip is from our Conscious Investing for Peace of Mind event when special guest Mark Matson came out to speak to our clients. Mark is the founder and CEO of Matson Money Inc., an investment advisor firm managing over $3 billion (as of 03/31/11) for investors nationwide, and manages millions of dollars for our clients.
This was an amazing once in a lifetime event. We all learned a lot from Mark about investing that day. Unfortunately for most investors, they will never learn the stuff we teach because the financial industry at large does not want investors to know this stuff. It is important to spread the word and share this information.
In this clip Mark teaches on how the cognitive part of our brain (what we know) often justifies bad investor instincts and causes investors to make irrational and costly decisions. This is probably the most important short video clip on investing you will ever watch, and something every investor should learn. Learn how to control your instincts and emotions and you will become a better investor by making better decisions. This is one for the archives!
Continue to learn, stay diversified according to your risk tolerance, stay disciplined, and rebalance. Education is your best defense against imprudent investing. Invest intelligently!
Dedicated to Your Peace of Mind,
John Borger & Scott Buchanan
Past performance is no guarantee of future results.
This is a special video we are sending out for the long weekend.This is one for the archives. Save this video until you can watch it. We recorded this video in October 2010 when Mark Matson came out from Ohio to speak to our clients. Mark Matson manages millions of dollars for our clients, focusing on obtaining market rates of returns in various asset classes, and controlling bad investor behavior so investors can obtain the market returns that are available to the disciplined investor. The sad truth is most investors don't get the returns that are available to them because of wrong behavior. In the first 11 minutes, Scott and I do an introduction and then Mark takes over. Very interesting stuff about investing you probably never thought about before. This is an important video for all investors to watch. This was a once in a lifetime opportunity we had and were blessed to have a $2.7 Billion dollar money manager teach us about money. For those that were able to attend you will love seeing it again. It was a great night. For those that were not able to attend, we recorded it special for you. Investor behavior is an important topic. Enjoy Mark's presentation...Conscious Investing For Peace of Mind! Feel free to forward this to other investor friends.
P.S. Thanks again to all of our clients and guests that brought toy donations for underprivileged kids at this event. We added to the generous donations and had a huge bounty of toys to donate. You made a lot of kids very happy...kids that need something good in their life!
Continue to learn, stay diversified according to your risk tolerance, stay disciplined, and rebalance. Education is your best defense against imprudent investing. Invest intelligently!
Past performance is no guarantee of future results.
▪ John and Scott
Examining Expectations - Overconfidence (5:57)
Most investors are smart people. This leads to the deadly trap of overconfidence. Overconfidence leads to trying to predict the future. If you are an overconfident investor, you will be humbled by the markets and your inability to consistently predict what is going to happen. Then the overconfident investor tells himself or herself necessary lies to justify imprudent behavior. Watch this video to make sure you remain a humble prudent investor.
Continue to learn, stay diversified according to your risk tolerance, stay disciplined, and rebalance. Education is your best defense against imprudent investing. Invest intelligently!
Past performance is no guarantee of future results.
Enjoy!
▪ John and Scott
Investor Behavior Bias (25:30)
We know that investor behavior is perhaps the biggest cost for investors. Would you like to know the behaviors that cost investors big money over time? This is one we should all watch several times per year in good markets and bad markets. This is a client approved presentation on behavioral bias. If you know the biases, they may not go away, but you can learn to control them so they don't lead to destructive and costly investor behavior. If you're honest with yourself, you might recognize yourself in this presentation.
Continue to learn, stay diversified according to your risk tolerance, stay disciplined, and rebalance. Education is your best defense against imprudent investing. Invest intelligently!
Past performance is no guarantee of future results.
▪ John and Scott
The Grand Enigmas of Investing Part 4 (7:38)
There are some things in investing that are hard to understand for investors. As an investor, you must be able to resolve these enigmas in your mind to be successful over your lifetime.
In this series of enigmas (part 4 of 4) Mark explains Enigma #4: Markets work in spite of wrong behavior by investors.
This is another enigma for investors. Some investors believe that they can take advantage of irrational investor behavior by buying or selling undervalued or overvalued stocks or sectors. After all, they are the rational ones, and everyone else is irrational. Check out this video and find out why it is impossible to factor in irrational behavior to consistently get a leg up on other investors.
Continue to learn, stay diversified according to your risk tolerance, stay disciplined, and rebalance. Education is your best defense against imprudent investing. Invest intelligently!
Past performance is no guarantee of future results.
▪ John and Scott
This Time Really is Different (24:04)
Are you prepared psychologically for an inevitable market decline? Market declines occur every year to varying degrees. The circumstances surrounding a decline in the markets are never the same. It's always different!
This is a great segment to watch and learn the right things to do when the inevitable downside volatility occurs. It is extremely hard to do the right things, but extremely important to be a successful investor for your lifetime. In this video (about minute 15), find out what attributes are necessary to be successful long term.
Every client can have different levels of risk and volatility in their portfolio, from very low risk, to balanced or moderate risk, to very aggressive. It is very important that you are in a portfolio according to the level of risk you can sustain for your lifetime (or a strategy that slowly reduces risk over time), which will allow you to remain disciplined and ride through the upside and downside volatility, while allowing us to rebalance your portfolio on highs and lows. Know your risk measurements. If you know your risk measurements you will know what to expect, and won’t be caught off guard when downside volatility occurs. Greater peace of mind comes from knowing your risk and knowing what to expect in down periods and up periods.
Don't be short term focused. Every year the markets go down for a period of time for all kinds of reasons, but they also go up, often unexpectedly. The last week, month, quarter, tells us nothing about the future. Performance must be measured over years, not months. We don't know which direction the next 20% will be, but the next 100% is always up. This fact is somewhat reassuring if you are a lifetime investor. Watch this video to find out what attributes are necessary to be a successful investor for your lifetime.
Continue to learn, stay diversified according to your risk tolerance, stay disciplined, and rebalance. Education is your best defense against imprudent investing. Invest intelligently!
Past performance is no guarantee of future results.
▪ John and Scott
This Time is Different...What's an Investor to do? Part 2 of 2
Part 2 of 2
Imagine an advisor coming to you with an investment strategy….when times are good and you feel better, when stocks are higher in price…we are going to buy (as long as you feel better). And, when times are bad when stocks are bad and you feel fearful, we are going to sell and go to cash. As long as you feel good, it is OK to sell when prices are down. Would you hire an advisor with this investment strategy for you? I hope not.
When you describe it sarcastically it sounds ridiculous. Yet, this is the strategy that many investors and other advisors implement, which often leads to dramatic underperformance over a lifetime as shown in the Dalbar studies.
Given the consistent negative headlines for months at a time, this is a video I want everyone to watch sometime this week, especially our clients that were unable to attend the event. Turn up the volume (due to the background noise in the beginning) and take some notes, you will learn some really good information to help you remain prudent in your investing strategies.
This week’s video is the video of a recent class we taught at the Conference Center “It’s Different This Time…What’s An Investor To Do?” We had a full house that evening. Due to the length we split the video into a two part series. Thank you to everyone for attending and wanting the continuing education. If you want to stay on track and get the returns you deserve, you must continue to learn about your investments and your prudent strategies.
Part one (found in Prudent Investing Basics) is me teaching the boring parts about the history of up and down markets, the importance of an investment policy statement, context of how much you have in stock, what unseasoned investors do, the importance of knowing your risk, we eat our own cooking, time horizon and time to recovery, and some good old fashion WISDOM about investing! I do get to throw in a couple of fun videos at the beginning and end of my segment.
In part two Scott teaches about how the “typical” investor makes bad investing decisions over and over again because they get in a “hot state.” Don’t know what that means? Check out the lesson so you don’t ever become that “typical” investor that makes bad decisions. An investor’s perspective changes when they are in an emotional state, and they make bad decisions. Behavior trumps all other factors. Without the proper behavior none of the stuff I teach you in part one matters. It all goes out the window. While it is not the same as being there and being able to ask questions and talk to other investors, this is a must watch lesson.
Continue to learn, stay diversified according to your risk tolerance, stay disciplined, and rebalance. Education is your best defense against imprudent investing. Invest intelligently!
Past performance is no guarantee of future results.
Drawing upon our emotions or gut feelings to make important investing decisions can be very costly. You may get lucky by guessing right once, but to guess consistently correct during a lifetime is almost impossible. The good news is, a prudent investing strategy does not require guesses, forecasts, gut feelings, or emotional based decisions.
Learn how the cognitive part of our brain (what we know) often justifies bad investor instincts and causes investors to make irrational and costly decisions. This is an excellent lesson on investor behavior every investor should learn. Share this video with your friends and family. Learn how to control your instincts and emotions and you will become a better investor by making better decisions. John provides some additional insight about investor emotions in minute 11. This is one for the archives!
Continue to learn, stay diversified according to your risk tolerance, stay disciplined, and rebalance. Education is your best defense against imprudent investing. Invest intelligently!
Past performance is no guarantee of future results.
▪ John and Scott
Examining Expectations - Hindsight Bias (5:25)
There are many in the financial industry that try and convince investors that they know what is going to happen. These “gurus” make boat loads of money off of unsuspecting investors wanting to believe there is someone that can tell them what is going to happen. These so called gurus are human like everyone else. Even the experts are lousy at predicting the future.
Investors themselves also get caught into this trap. We sometimes hear from some investors (usually prospects because our clients know better)….”I knew this was going to happen.”We then say, “Did you bet all your money on this knowledge?” Of course, the answers is always no. If they truly knew, they would bet all their money on the short term direction of the markets. This is called hindsight bias. They really didn’t know…they just think they did. You must keep this emotion in check as an investor. Everything seems so clear in hindsight and it gives us a false sense of security.
The next question I ask is, “What is the market going to do next?” I always get some sort of wishy washy answer, because they really don’t know, they are just guessing. And again, if they did know, they would simply bet all their money on the short term direction. Markets will humble investors into oversized losses and underperformance when trying to guess the short term direction. Anyone can get lucky, but no one that I have found has been able to guess consistently over time, more often than not resulting in costly under performance.
Hindsight bias is very detrimental to investing. After the fact investors look back and say, "I knew that was going to happen, or I knew that stock was going to go up, or I knew gold was going to go down". Pick any investment and plug it in after "I knew". When looking back the past seems to have been so easy to predict. It's not! Don't kid yourself. If you guessed right, know that it was only a guess. Don't give yourself a false sense of security that you can now predict the future with any reliability. Watch this video to find out how to avoid this trap.
Continue to learn, stay diversified according to your risk tolerance, stay disciplined, and rebalance. Education is your best defense against imprudent investing. Invest intelligently!
Past performance is no guarantee of future results.
▪ John and Scott
Examining Expectations - False Patterning (6:10)
Investors see patterns where none exist. The markets are random during short periods. Technical rules are broken every day. False patterning is seeing patterns that really don’t exist. Don’t use this useless information to try and predict the future.
The simple truth is no one can predict the future, not even a chart. There are too many unpredictable future variables (good and bad) that drive the market prices up or down short term. Think of all the factors that go into market prices…the weather, natural disasters, manmade disasters, political decisions, technology discoveries, medical discoveries, where you shopped (or didn’t shop) today, people’s feelings, hopes dreams, instincts, perceptions, facts, data, statistics, new news, and the list goes on and on. There are literally trillions of variables. There is no chart or system that can factor in these unknown random variables to reliably predict a stock price or market direction. There are many “gurus” that will make you believe that they can. If you are an educated investor, you won’t be duped. Watch this video to find out how to avoid the trap of false patterning.
Continue to learn, stay diversified according to your risk tolerance, stay disciplined, and rebalance. Education is your best defense against imprudent investing. Invest intelligently!
Past performance is no guarantee of future results.
▪ John and Scott
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