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117: Coronavirus and Your Retirement with Daniel Crosby

daniel crosby

behavioral investor daniel crosby

 

Today’s guest is Daniel Crosby. Daniel is the Chief Behavioral Officer at Brinker Capital, where he helps organizations better understand the intersection between minds and markets. Daniel has more than 10 years of experience in the financial services industry and has published a number of bestselling books that serve as guides to building stronger advisor-client engagement with a focus on achieving better outcomes.

Daniel gets not just how markets work, but why people make decisions – both good and bad – as they invest and build financial plans.

In his book, The Behavioral Investor, he examines the sociological, neurological and psychological factors that influence our investment decisions and sets forth practical solutions for improving both returns and behavior.

All of these things make Daniel uniquely qualified to speak on today’s topic: COVID-19, also known as the coronavirus. With the markets down and fear and panic in the streets, Daniel lends his unique expertise to the financial challenges of this moment. We discuss the psychology of behavioral investing, why so many people make bad decisions during a downturn, and why we always act like we’ve never seen anything like this before – and what you should be doing with your money to best stay on track to live the retirement you want.

In this podcast interview, you’ll learn: 

  • Why humans prefer knowing something that’s guaranteed to be bad instead of being uncertain – and what to do in the face of uncertainty as an investor.
  • Why emotional investing is so dangerous – and how often you have to be right in order to outperform an investor who holds.
  • Why almost every 30-year period across markets has been very good – and why it’s so hard for investors to believe that in the event of a significant downturn.
  • What makes the coronavirus crisis uniquely different from the Great Recession of 2008 – and how it puts the purpose of money into perspective.
  • How you and your financial advisor can envision a worst case scenario before a market downturn to make better plans.
  • Why “invest in what you know” is such profoundly bad advice.
  • Why business owners should always invest in asset classes outside their industry – and why the entrepreneurial mindset and the investor mindset are so hard to reconcile.
  • Why the average person has no business buying and selling individual stocks – and the benefits of substantial diversification.
  • Why Daniel recommends you check the status of your investments as little as possible.

Inspiring Quote

  • “Is the market risky over a 30-year horizon? Not really. Is it risky for people who make panicked decisions from moment to moment? Yeah.” – Daniel Crosby
  • “We are more emotional about money than anything. You get more brain activity out of money than images of beautiful people or fear of death.” – Daniel Crosby

Interview Resources

Read The Transcript