Strategies and tactics for making better decisions
We can see the effects of the Ukraine War on the financial markets in the charts below. These charts are updated daily. They help us get a sense of how investors see how the war is going, and its effects on the world economy, now and in the near future. Ruble vs. US Dollar source: … Read more
We make thousands of decisions every day. Under pandemic conditions, many of these mundane decisions have suddenly become life or death choices. No wonder anxiety is rippling through society. Should we: get needed medical care; go to the park, see friends and family; go shopping; order-in; eat out; or send our kids back to school? Decisions … Read more
Ever since I changed careers to one with less income, I’ve been dying to talk to friends in similar situations about the financial aspect of their decision. How did they get comfortable that they had saved enough? How do they align their investing and spending with their values and reduced income? I likely waited too … Read more
How many things do we avoid because they could be boring? Meetings. Religious services. Chores. Waiting in line or on hold. Exercise. You can surely add your own. Intellectually, we know that each of these activities could be valuable, but we avoid them because the discomfort of boredom looms larger. What is boredom, really, how … Read more
A. Not us humans, that’s for sure.. Any objective view of the state of our economy, politics, technology and even our own day-to-day behavior provides loads of evidence that we are living for the moment. We don’t save enough for our retirement, our planet continues to warm and our economy gets more unequal because we … Read more
Alpha is finance-geek speak for an investor’s skill that allows her to outperform an index, like the S&P 500, on a risk adjusted basis. At a recent behavioral finance conference, I sat on a panel that addressed the idea of behavioral alpha. Our moderator asked, “What is it and how do we get more of it?” I offered the observation that, … Read more
I never could have imagined how important managing emotion, cognitive biases and behavioral hurdles is to saving enough, spending wisely and managing financial risks. For about a year, I informally coached a woman (we’ll call her “Leigh”) in her late twenties who wanted to eliminate the $5,000 of expensive credit card debt she was rolling over each month, … Read more
Trump’s federal government shutdown, May’s Brexit proposal, Sears’ and Victoria’s Secret’s retail strategy, even my own struggling start-up: these are all examples of potentially failed strategies. These strategies might have had a chance had they been created using a little Design Thinking. This is a creative problem-solving process that eschews grand solutions in favor of an incremental, failure-welcoming, iterative … Read more
Do you get stressed around the holidays with just too much to do? Many of us feel more stress, anxiety and depression during the holidays. In addition to the normal demands of running a start-up and teaching, I’ve got presents to buy, travel to plan and a child to get to college. At last count, I … Read more
Is there any financial decision that we dread more than the annual chore of choosing a health insurance plan? It’s got everything we hate: choice and information overload, time pressure, ambiguity and confusion, consequences worth thousands, uncomfortable scenarios involving disease and injury, inscrutable jargon coming at a time of the year full of other business, … Read more