Modifying Investor Behavior: How Advisors Can Protect Clients From Their Worst Instincts

Explore how behavioral finance rests on the disarming notion that rational man does not exist. It’s an unsettling idea since rational behavior is a bedrock premise underlying traditional economic and finance theory. American Portfolios Chief Investment Officer Cliff Walsh gives some insight into what drives an investor’s decision process.

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    Modifying Investor Behavior: How Advisors Can Protect Clients From Their Worst Instincts

    Strategy One: Know Thy Client

    The principle of “know your client” is essential to providing suitable investment advice. Standard questions about investment experience, risk tolerance, and investment time horizon, however,
    don’t go far enough. From a behavioral investing perspective, advisors need to dive deeper if they are to get a better appreciation of a client’s unique behavioral risk personality. This can be done in
    two ways.

    Strategy Two: Consider New Approaches

    As the person closest to the client, the advisor will be in the best position to tailor his or her approach to each client. Nevertheless, here are some ideas for managing some of the investor behaviors that advisors confront.

    In this white paper, Modifying Investor Behavior: How Advisors Can Protect Clients From Their Worst Instincts, we explore behavioral finance rests on the disarming notion that rational man does not exist. It’s an unsettling idea since rational behavior is a bedrock premise underlying traditional economic and finance theory. American Portfolios Chief Investment Officer Cliff Walsh gives some insight into what drives an investor’s decision process.

    Download the whitepaper here.

     

    About The Author

     

    Chief Investment Officer 
    631.439.4600 ext. 277 

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