Biased Brains and Bubble Talk

If you are a human and an investor there is good news and bad news.  The bad news first.  Your brain sucks.  It operates in almost every way possible to encourage you to make bad investing decisions.  It is also why you care a lot more about the Fed’s actions than you really should.

A test will easily demonstrate your faulty brain at work.

It’s Déjà Vu All Over Again: 1994

The volatility in the stock market AND bond market over the past few days has everyone concerned.  Forget that the US market is still up over 10% for the year. We all tend to get very myopic in our vision when the stock market starts to waiver.  Especially when bonds, which are supposed to protect us in down markets, are also losing money.  It can make the thought of just selling everything and going to cash seem appealing.  But as history reveals, that can be a very costly mistake.