Two Questions With Daniel Crosby

In this bonus audio, psychologist and behavioral finance expert Daniel Crosby explains his preference for a rule-based, low-turnover approach to investing. He then shares the biggest lesson he’s learned over the course of his career. You can see Crosby’s full interview in the January 2019 AAII Journal: Steps You Can Take to Reduce the Risk…

 

Jeopardy! Shows Humans Don’t Maximize Profits

One of the common behavioral biases is anchoring. Anchoring is basing expectations and viewpoints on previous, often recent, information. An example would be the yield on the 10-year Treasury note. The benchmark bond yielded 1.59% today. If it were to rise over the short term to, say, 2.0%, your opinion would likely be that rates…