BERWYN, PA — To provide financial advisors with a better understanding of how an individual’s behavior impacts their investing philosophy, Brinker Capital – a leading investment management company focused on multi-asset class investing – released the second chapter of its Behavioral Insights series: Investor psychology – common behavioral investing errors.
“Over the past few months, we’ve seen firsthand how emotion can dictate our reaction to the health and economic changes happening around us,” said Daniel Crosby, Chief Behavioral Officer at Brinker Capital.
“Managing external pressures versus our own investment instincts can be a balancing act but knowing common behavioral investing errors and the unconscious tendencies we may have is key to being a successful investor.”
The second chapter of the Behavioral Insights series focuses primarily on investor psychology and overcoming common behavioral investing errors, including:
- The behavior gap: Measuring the loss an average investor incurs as a result of emotional responses to market conditions
- Four most common behavioral errors: ego vs. humility; conservation vs. aggression; emotion vs. robotic; and attention vs. distraction
- Mental accounting: people tend to bucket their money according to different risks or goals, but mental accounting can make it difficult for an investor to track their asset mix and asset correlations
“We’re excited to further our mission of helping advisors engage meaningfully with their clients,” said Noreen D. Beaman, Chief Executive Officer at Brinker Capital.
“Through the Behavioral Innovation Lab, we are committed to enriching advisor-client engagement with tools, training, and technology to provide for the practical application of behavioral finance. This is another step forward on our roadmap to success.”
The Behavioral Insights series is the first project brought to market by the Behavioral Innovation Lab, powered by Brinker Capital.
It’s designed to educate financial advisors on some of the most important concepts of behavioral finance. Armed with new perspectives, advisors and their clients can be more effective when making investment decisions that help them stay true to their financial goals and objectives.
The series is divided into three parts focusing on:
- The behavioral investor – benchmarking and investing for yourself,
- Investor psychology – common behavioral investing errors, and
- Behavioral alpha – the value of financial advice.
To download the first two chapter in the series, please visit: http://www.bcbehavioralinnovationlab.com/behavioral-insights/.
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