cover of episode Transforming Financial Regrets into Portfolio Gains: Five Strategies for Navigating Investment Emotions

Transforming Financial Regrets into Portfolio Gains: Five Strategies for Navigating Investment Emotions

2024/2/7
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Money For the Rest of Us

AI Chapters Transcript
Chapters
This chapter explores the cognitive biases that make financial regret unavoidable, primarily focusing on loss aversion and hindsight bias. Loss aversion causes the pain of losses to be felt more strongly than the pleasure of equivalent gains, while hindsight bias makes past events seem more predictable than they actually were.
  • Loss aversion: Pain of losses outweighs pleasure of gains
  • Hindsight bias: Past events seem more predictable than they were

Shownotes Transcript

Humans are wired to feel regret. Here's how to learn from financial regret to become a better investor.

Topics covered include:

  • What cognitive biases make feelings of financial regret unavoidable
  • We analyze two regret case studies - one from David and one from a Plus member
  • Why do we avoid big regrets but manage through small ones
  • Five cognitive tricks to help manage financial regrets

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Show Notes

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb—Penguin Random House)

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