Articles

To process financial information, our minds often attempt unwise shortcuts. By understanding behavioral finance, we can limit the information we use and keep our decisions balanced and on track.

The benefits of investing in the countries with the most economic freedom.

One of the early studies on herd mentality was the Solomon Asch experiments in the 1950s. The setup was a mock vision test. In reality, all but one of the participants were actors, who after a few correct answers started agreeing unanimously on a wrong choice.

Think of confidence as a continuum: Lack of confidence is paralyzing, self-confidence is good, but overconfidence is deadly. Successful investors seek to find a balance between rashness and timidity. Understanding the psychology that causes us to act overconfidently will help you avoid it.

The essence of successful financial planning is using your money to meet your life’s goals. Curiously our minds tend to fall prey to the fallacy that behavioral finance calls “mental accounting”.

Our first reaction to a complicated situation, usually instinctive, often does not serve our best interests. One heuristic that the brain uses to solve complex evaluations is to make an initial guess and then adjust from that point. This mental process is called “anchoring.”

You can both diversify for safety and boost your returns by adding international investments to your portfolio.

A year ago when the markets were all setting new highs, people were asking what they should do with their retirement portfolio. I answered, “Rebalance.” Now that the market is setting new lows, I get the same question, and my response hasn’t changed.

You can hedge your assets against underreported inflation and protect your retirement goals.

Inflation at this rate causes serious harm to our nation’s economy and its citizens.

Officially, inflation today is calculated about 4%. Unofficially, it is over 7%.

David Marotta discusses retirement and how to avoid several common pitfalls in planning for the last 30 years of your life.

Certain assumptions such as maximum safe withdrawal rate are critical in order not to compromise a long and successful retirement.

Eight exceptions to the age 59.5 rule allow for penalty-free withdrawals.

You can’t spend money apart from your lifestyle because that’s the definition of lifestyle.