Back to the Investment Basics Part 2: First Save, Then Invest
In our last piece, we wrote about how recency bias can damage your investments by causing current crises to loom large, while rewriting your memories of past challenges. Recency tricks us into overpaying during heady times, and bailing at bargain rates, when our confidence fades.
One of the best ways to combat recency bias is by focusing instead on the basics that have served investors well for centuries, if not millennia. In this series, we’ll cover five of our favorites:
You can’t invest if you haven’t saved.
Markets are inspired by ingenuity, tempered by diversification.
The price you pay matters.
Patience is a virtue.
Investing is personal.
Today, let’s talk about saving.
Robert J. Pyle, CFP®, CFA, AEP® founded Diversified Asset Management, Inc., in 1996 to provide personalized, comprehensive wealth management services to successful individuals, families, single women, and business owners. His specialty is addressing the complex financial needs of self-employed professionals, corporate executives, and small-business owners. Our disclosure can be found here. The views, opinion, information, and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting, or tax advice.