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Sometime around 2000, I gambled some of my money away while fooling myself into thinking I was doing something very sophisticated. I wasn’t in Las Vegas: I was sitting at my computer buying shares of Krispy Kreme Donuts on eTrade. I had seen the front page of Forbes or Fortune or some other publication touting the company’s success and its future prospects, and decided on my own, without seeking the counsel of my wiser …
Our data consistently tells us that in the arena of personal-finance outcomes, behaviors matter. They matter a lot. So we thought it was time to try and quantify—from a dollars and net-worth perspective—exactly how much is “a lot.” We’ll consider savings rate as a critical behavior. We have talked here before about the difference in savings rates between “high-potential” and “low-potential” individuals, as measured by scores on the DataPoints Building Wealth assessment. As a quick …
We have an operating theory here at DataPoints that goes like this: portfolio returns are being commoditized for the vast majority of retail investors–either by robo-style services or index strategies, or both–and that this large swath of the population will be willing to pay less for the (likely illusory) promise of market-beating portfolio returns from their would-be financial advisors. This development will in turn put pressure on the financial services industry in general and …
We define volatility composure as a combination of past experiences and behavioral patterns that describe how an investor typically reacts to changes in the market value of his or her investments as well as overall changes in the value of the stock market. How will the individual actually behave–as opposed to how they think they will behave–when the stock market goes haywire (as it is doing now for the first time in quite some time)? …
According to Vanguard’s Advisor Alpha study, working with an advisor can add incrementally to an investor’s portfolio. Half of the contribution of an advisor’s value is through behavioral guidance. This guidance includes helping clients to make better investing decisions, ignore the herds, and stick to a strategy. These findings beg the question: Would these benefits increase if we added a framework to the guidance that advisors provide? To create a better mousetrap of understanding …