We can’t discount the impact biases play, even if we’re not aware we have any. Another favorite sketch shown above from Carl Richards of Behavior Gap illustrates that how we behave has the greatest impact on our performance. In the investment policy and risk awareness questions that we require all clients to complete, we ask a few behavioral finance questions that help us understand how a client will react, or what will stress them out as they watch their balances grow or decline. What are your expectations, regrets or aversions? Are they realistic, and what will you do if these expectations do or don’t come to fruition?
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