The Wrong Kind of Contrarian

Well, this chart pretty much says it all about human beings not being naturally inclined to make good financial decisions.  For those of you that don't like charts, I will summarize - individual investors are prone to sell when they should be buying and prone to buy when they should be selling.  Over the last several years, as stocks have been rising, individual investors have been pulling funds out of stocks (yes, those outflow numbers are in billions!). Click here for the full article in the Wall Street Journal.Read more

I’m An Excellent Driver

We often misjudge ourselves and overestimate our abilities. In a word, we are overconfident. If you are confident that you are not overconfident, then I would suggest that you might want to keep reading! One of my favorite examples of overconfidence was a survey where a group of people was asked to rate their driving abilities. Approximately 90% of the respondents rated themselves as above average drivers! It doesn’t take a Ph.D. in statistics to know that this is statistically impossible (unless, of course, you live in Lake Wobegon). In Why We Make…Read more