Understand how large losses can have a disproportionate effect on investors financially and emotionally.
Most of the content published on this topic explains what behavioral finance is, its significance, and the definitions of various biases that plague investors. Here are four actionable steps advisors can take right now to implement behavioral finance concepts.
Conversations with investors about risk is often muddled with industry jargon they often find unrelatable. Redefine the risk conversation to better align with the way investors think about risk-- the pain of losing money.