Would You Trade A Bad Season For a Final Four Next Season?
Submitted by Moneywatch Advisors on January 26th, 2018
If you looked at Twitter or Facebook after UK lost two games in a row last week – on the road to South Carolina and, even worse, at home to Florida – you would think the season was over. Distraught exclamations like, “I’m off the bandwagon”, “Cal’s one and done system doesn’t work” and “We’ll never make the tournament now” dominated the comments. There is a psychological term for this called Momentum Bias. Simply put, we tend to believe when things are going poorly they will continue to go poorly. Similarly, when we’re on a roll, we expect that to continue too. This same behavioral bias affects people’s views of the stock market. These emotions are quite normal and explains part of the value a good financial planner provides – we help remove the emotion from saving and investing by helping clients focus on their long-term goals.
