Behavioral Factors That Influence Investment Decisions

March 22, 2017  |  

Behavioral Factors That Influence Investment Decisions

In my previous post we looked at the four keys to understanding factors that impact investment risk and return. Here we’ll explore the human factors that influence investment decisions more than you might think.

No matter how much discipline and empirical research they have at their disposal, the clear majority of investors have difficulty sticking to their plan when confronted by enormous fear or opportunity. This irrational behavior has its roots in physiology and human genetics. Here we’ll learn how an experienced advisor can help you from behaving irrationally and learning to recognize (and prevent) succumbing to the six most common behavioral biases tripping up investors: Herd Mentality, Recency Bias, Confirmation Bias, Overconfidence, Loss Aversion and Sunken Costs.


  • Insight #11: The Human Factor in Evidence-Based Investing
  • Insight #12: Behavioral Basics: What Makes Your Brain Tick?


Thanks for watching our video series. You don’t have to be smarter, faster or luckier than the rest of the market’s participants to be a successful investor. Using an evidence-based approach to investing is more effective because it gives you a well-grounded strategy that’s easier to stick with in both good and bad markets. In short, an evidence-based approach lets you capture the returns available from the capital markets in a low-cost, diversified and disciplined manner. That’s the key to long-term investment success.



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About Chas Boinske

Charles P. Boinske, CFA, is a 30 year investment management veteran overseeing the strategic direction and portfolio management process for Independence Advisors, LLC. Have a question for Charles? CLICK HERE TO ASK CHARLES
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