Money and the Brain

There are strategies to achieve a better inner calm.

Don’t delay getting your finances in order until you get your finances in order. Ask for help today and see what wisdom a financial advisor has to share.

Evaluate the source. Question the melodrama. Examine the tone. Consider the motive. Check the facts.

Gil Weinriech, Senior Editor for Seeking Alpha, wrote recently about investors whose personalities tempt them to stay on the sidelines of investing at times.

The same grit that drives entrepreneurs to success can drive their investments to failure.

When the client asked my mother, “What is the quickest way to double my money?” she did not hesitate before she answered.

If you budget well according to your values, a one-pocket theory of money enriches your life, prioritizing your financial dreams above your impulses.

To illustrate this principle, I analyzed a week’s worth of “Morning and Midday Market Views” provided by the Schwab Center for Financial Research.

No one would click on the headline, “Stocks went up today and we have no clue why.”

Many advisors and most investors don’t really understand the math on how to compute investment returns.

Our minds are wired to quickly generalize on perceived trends and react to them.

Long term investing does not require making quick emotional responses.

Real financial advisors stand between you and the Big Mistake.

We tracked the price of a first class stamp over the last 130 years, noting the changes, to show the steady erosion in buying power during that time.

“It is always a difficult experience for investors to stay in markets.”

Taking inflation into account changes nearly everything about financial planning.

While many investors say they want a low-correlation portfolio, they don’t want to actually experience a low-correlation portfolio.

While Santa Claus usually brings something positive for the markets, it isn’t enough to worry about jumping in and out of your investments.

“Nothing has provided greater risk control over the long term than equities, which are historically without principal risk over 30-year periods…”

Many people are first exposed to investing in grade school through a very simple game. Unfortunately, this game teaches all the wrong lessons.

Staying the course when an index investment is down is very uncomfortable in the short-term but usually the best course of action in the long run.

Contrarian indicators have paid off historically.

Stocks less frequently traded have better returns.

Here’s how a good advisor should respond when you call about losses in your account.

Is there a correlation which would justify talking about “the momentum of the markets”?

The best antidote to the stress of market volatility is to understand that the markets are inherently volatile.

“In reflecting on our experiences as advisers and investors, we’ve come up with what we believe are the key and often unspoken wants and needs of our investors.”

When it comes to finances, just shut your eyes and keep them closed.

The stock market is one of the few places that when things go on sale we are less likely to want to buy.

Our brains are not wired well for handling the fluctuations in the stock market. Could a financial advisor help?

Don’t let short term volatility ruin a brilliant long term investment strategy.

You learn a lot by the discipline of reading old news.

“Emotion can undo the best-laid financial plans.”

Sometimes the best advice is when a competent advisor tells you that you are wrong.

Investments consistently outperform investors.

Behavioral psychology research suggests that you should send your best ideas to the grave.

The S&P 500 has nearly doubled in the last four years. Yet many investors are left feeling more disillusioned with their investments than ever before. Some of this discontent can be combated by understanding the psychological effects of market volatility.

This kitten isn’t afraid of the markets. Be more like this kitten.

Follow a philosophy so that there is always a smart place to get money

This kitten measures success from the bottom not the top. Be more like this kitten.

Parents take note: Research on delayed gratification shows connections from children through adulthood.

Sometimes the medium term trend seems to weigh more heavily in our minds than the long or short term trends.

Studies show that onetime windfalls can actually impoverish you. They make you feel rich, which inevitably leads to overspending. But wealth is what you save, not what you spend.

“Perfectly rational individuals exhibit changing risk aversion that makes it hard for them to rebalance into high-return assets that have had steep price declines.”

Most work toward equality of results impoverishes everyone.

How often do you intentionally push yourself to discomfort? Do you think the best retirement is relaxing and recreating? Think again.

Women are more afraid of becoming “bag ladies” than men, and it makes them approach investing and saving for retirement differently, assuming they have managed to tackle either of those chores.

Client resistance is an inevitable part of the financial planning process. It’s a sign the advisor is doing his or her job.

Listen to David John Marotta’s interview on growing rich slowly: the four secrets of an automatic millionaire

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