The Asset Allocator: Dalbar’s Louis Harvey On What Drives Investors To Lose Money (Podcast)

The Asset Allocator: Dalbar’s Louis Harvey On What Drives Investors To Lose Money (Podcast)

By SA For FAs

August 7, 2019

Summary

Investment consultancy Dalbar’s latest research suggests that it is a mistake for advisors to assume that investors have a static risk tolerance. The firm’s president Louis Harvey says it changes constantly – on the basis of both market conditions and the client’s constantly shifting personal status. The firm’s analysis of equity flows demonstrates clearly that market conditions prompt clients to buy and sell stocks – at the wrong times. Harvey suggests defining investor goals in simple understandable terms (e.g., “house fund”) and designating separate pools of funds for each investor goal.

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Just A Little Too Cute For Their Own Good

Just A Little Too Cute For Their Own Good

By Frank Armstrong III

August 16, 2019

Shortly after I discovered that I could ride my bicycle no hands it occurred to me that I could stand on the seat. My mother, watching from the yard called out that I was being just a little too cute for my own good. That warning was followed up almost instantly by a memorable crash to the sidewalk. To my credit, I learned from my over confidence and didn’t try that again. But, seventy years later I still have traces of the scar on my chin.

Despite repeated pointed reminders, many investors continue practices that are just […] Read more