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Talk to UsBuy low, sell high. Sounds simple. Why can’t more investors do it? Often, the answer is behavioral in nature. Research shows that investors often buy too high and sell too low, underscoring the role of emotional decision making in investing. For financial advisors, the challenge is to cultivate strategies for becoming effective managers of behavior, not just managers of money.
Our process entails (1) understanding the role of emotions, psychology and biases, (2) developing a client communication plan aimed at dealing with and anticipating biases and outside influences, and (3) developing strategies intended to influence behavior, such as finding reliable, consistent and objective sources of market and economic data and developing “deeper” profiling questions to anticipate client emotions.
We believe understanding behavioral finance begins with an understanding of recent years’ advances over traditional economic theory:
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Workshop to help you build business and drive sustainable growth in advisor practices. Contact your GSAM representative for more information.