In this week’s episode of the Retirement Solutions Show, Ralph Hicks, David Hicks, Michael Hicks, and Ryan Gilmore discuss the common behavioral trap known as loss aversion.
Investors and advisors alike tend to overlook the psychological side of investing and how it can lead us to make poor decisions based on emotion. Over the next several weeks, Oakmont seeks to uncover common behavior traps so that listeners can make smarter financial decisions.
In this episode, the team at Oakmont shares tips about how to avoid falling victim to loss aversion, including:
- What is loss aversion?
- Why understanding loss aversion is crucial to making smart investment decisions
- Ways we’ve seen loss aversion affect investors
- How knowing your Risk Number can help you avoid irrational decision-making
- Why you should plan for how you will react to certain financial events
Curious about your personal Risk Number? Take the free, short quiz to determine your personal risk tolerance.
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