Let’s continue our alphabetic tour of common behavioral biases that distract otherwise rational investors from making best choices about their wealth. Today, we’ll tackle: fear, framing, greed and herd mentality.

Fear

Welcome back to our “ABCs of Behavioral Biases.” Today, we’ll get started by introducing you to four self-inflicted biases that knock a number of investors off-course: anchoring, blind spot, confirmation and familiarity bias.

Anchoring Bias

By now, you’ve probably heard the news: Your own behavioral biases are often the greatest threat to your financial well-being. As investors, we tend to leap before we look. We stay when we should go. We cringe at the very risks that are expected to generate our greatest rewards.

Generally speaking, conversations about life insurance revolve around whether you should buy term or permanent insurance. However, every decision to buy life insurance begins with deciding what is the right amount of life insurance. And, integral to determining the right amount of life insurance is understanding the role of your Social Security Survivorship Benefit (SSSB).

When looking for any professional advisor, it is important to be able to match their characteristics, temperament, client profile and experience level to your own profile.

It stands to reason that, people who manage to get to the gym on a regular basis are generally healthier people. What you may not know is that they can also be wealthier people because they may pay lower premiums on their insurance.

The new tax law hasn't been formally ratified by the U.S. House and Senate, but all indications are that the Tax Cuts and Jobs Act of 2017 will be sent to the President’s desk in the next few days.  As you probably know, the House and Senate versions were somewhat different.  What does the new bill look like?

You may have read that hackers broke into the Equifax database and stole personal information tied to 143 million people.  The hackers accessed people’s names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers.

How well do you connect with other people in informal social occasions?  If you tend to be shy or awkward at cocktail parties or networking events, it can be bad for your career and rob you of connection with others who might become friends or mentors. 

Have you ever stopped to wonder why 60 is considered retirement age? Some public services - like the police force in certain countries - require you to stop working at 60.