18 April 2014

Weekend Reads for Finance Pros: Investing, Making Bad Choices, and Yawning

Posted In: Weekend Reads

I can’t tell you how many times I have seen Carl Richards‘ sketch of a Venn diagram showing the intersection of “things that matter” and “things you control.” But it’s a lot. It did the round on Twitter again this week and somehow the message never gets old. So to kick off this week’s selection of articles, blog posts, and photography, here’s a reminder:

All about letting go MT @PDXchuck: Control what you can control. Don't bog down in the things you can't @behaviorgap: pic.twitter.com/JZNIxWJlIV

— Lauren Foster (@laurenfosternyc) April 15, 2014

Investing

Investing for the long term is wise, but recognize that “long term” doesn’t mean “all the time.” (Bason Asset Management blog)
Are women more risk averse as investors or more risk aware? (Above the Market)
Why do investors make bad choices? Quite simply, because they are human. In this column, Cass Sunstein discusses “three classic behavioral mistakes” he made in 2011 when he fell victim to availability bias, loss aversion, and probability neglect. (Bloomberg)
On the subject of human fallibility and behavioral biases — and what, if anything, we can do to try to mitigate the effects — Terry Odean tells Bob Seawright: “Someone once said to me, ‘We can’t control our initial reactions, but we can learn to control what we do next.’ Investors will always have cognitive biases. One approach to overcoming them is to practice recognizing biases when they manifest themselves and then adjusting our behavior.” (Above the Market)

Financial Planning and Retirement

According to the US Department of Health and Human Services, about 60% of Americans over the age of 65 will, at some point, require
long-term care. Here’s a checklist of questions to help you (and your clients) make an informed decision when buying a long-term care insurance policy. (Tamarind Financial Planning’s blog)
In her essay, “Our Brains Aren’t to Blame for Our Financial Woes,” author Helaine Olen takes on the Behavioral Economics Complex, particularly as it relates to retirement planning. (Bloomberg)
Forty-two percent of high-performing advisors target Generation X and Y investors, compared to 17 percent of other advisors, according to a Fidelity study. (Financial Advisor)
Speaking of which, financial advisors take note: “Millennials: Young and Poor Now, But Your Mainstay Clients Someday.” (InvestmentNews)
In the US, health savings accounts double as a retirement tool. (The Washington Post)
Should we force people to save for retirement? A human resources manager responds: Can you save non-savers from themselves? (Bloomberg)

RT @NYTFridge: Would mandated savings for the young guarantee access to their #retirement funds? Saving Young People http://t.co/n21oCMYrSO

— Lauren Foster (@laurenfosternyc) April 13, 2014

Rise of the Robo-Advisor

“Financial Advice for People Who Aren’t Rich” (New York Times)
Wealthfront, Betterment, and LearnVest raised $95m in capital in two weeks, prompting Michael Kitces to ask: Is there a “robo-advisor” bubble? (Nerd’s Eye View)
“The Rise of the Robo Advisors” (Financial Advisor)
“Why I Find the Term ‘Robo-Advisor’ Objectionable and Unhelpful” (RIABiz)

And Now For Something Completely Different

Warning! Reading this article on the surprising science of yawning may lead to yawning. (The New Yorker)
If you are a regular reader of Weekend Reads, you’ll know I’m a fan of photography. This week, a series of otherworldly photos of eagle hunters and huntresses in Mongolia made the rounds on social media. (BBC World Service)
Last week’s best photojournalism (The Week). Check out the Captured blog for this week’s selection (updated every Friday).
Something to think about:

If your employer owns your ideas, will you be less creative? Via @ajp112: http://t.co/30bNFG8AYr

— Adam Grant (@AdamMGrant) April 15, 2014

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

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About the Author(s)

Lauren Foster

Lauren Foster was a content director on the professional learning team at CFA Institute and host of the Take 15 Podcast. She is the former managing editor of Enterprising Investor and co-lead of CFA Institute’s Women in Investment Management initiative. Lauren spent nearly a decade on staff at the Financial Times as a reporter and editor based in the New York bureau, followed by freelance writing for Barron’s and the FT. Lauren holds a BA in political science from the University of Cape Town, and an MS in journalism from Columbia University.