Masters in Business At The Money: Humans Are Not Built For Investing
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Aug 7, 2024 
Dr. Daniel Crosby, Chief Behavioral Officer at Orion Advisor Solutions and author of "The Laws of Wealth," teams up with finance leader Barry Ritholtz to explore why humans struggle with investing. They discuss how emotional biases, such as overconfidence, cloud our judgment and emphasize the need for a systematic, rules-based approach to investing. The importance of professional guidance is highlighted, showcasing how financial advisors can mitigate these biases and enhance decision-making, especially in unpredictable markets.
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Investing Is A Behavioral Problem
- Humans excel at art and science but are poorly suited to investing due to biases and impatience.
- Recognizing this mismatch reframes investing as a behavioral problem, not just a technical one.
Use Simple Rules And Checklists
- Use simple rules and checklists because they match or beat expert discretionary decisions 94% of the time.
- Implement rules because they are effective and far cheaper than hiring more analysts.
Control What You Can
- Focus on what you can control like fees, diversification, and working with a professional.
- Ignore unknowable factors (Fed, elections, wars) because they are outside your power and less predictive.