I’m reading a new book by Jason Zweig called “Your Money & Your Brain.” I’ve known Jason for years. You’ve probably followed his work as an editor at Forbes and Money Magazine. The book draws on the latest research in neuroeconomics, a fascinating new discipline that combines psychology, neuroscience and economics to better understand financial decision making. He shows why we often misunderstand risk and why we tend to be overconfident about our investment decisions. Without getting too complicated, Jason points out that most investors, left to their own devices, do poorly as their emotions ultimately get in the way. If you get a chance, I think it’s an excellent read for ETF investors as well as investors in general.
As I was reading the book, I was continually reminded of how our non-emotional and mathematically-based investment plan helps us from making wrong decisions at the wrong times. It helps us keep our emotions out of the picture.
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