
How to Prepare for a Market Downturn
A safety net analysis allows you to understand how long you can withstand a downturn and what changes might be appropriate during this stage of a bull market.
The Blog
Evidence over opinion. Data over drama. Practical strategies you can use today.

A safety net analysis allows you to understand how long you can withstand a downturn and what changes might be appropriate during this stage of a bull market.

People place too much importance on explaining individual pieces of the market and not enough on how others think those pieces will interact with each other.

When you view financial markets as a complex adaptive system, it is easier to eliminate the futile cause and effect thinking that plagues so many investors.

It’s tempting to think about the possibility of buying and selling at just the right moment, but time is more important to investment success than timing.
Behavioral Finance
Our brains think of saving like a choice between spending money on ourselves today versus giving it to a complete stranger. The result is a propensity to spend today rather than save for the future. To combat this tendency, you can leverage your imagination to make better financial decisions.

Your opinions on the market don’t mean much considering the wealth of information you’re up against.

The Digital Age has made access to stock market data and real-time portfolio values increasingly easy, but it causes investors to lose sight of the big picture. Myopic loss aversion is the idea that the more we evaluate our portfolios, the higher our chance of seeing a loss and, thus, the more susceptible we are to loss aversion.
Behavioral Finance
There isn’t anything wrong with reviewing evidence that supports your investment philosophy, but a significant portion of your efforts should be dedicated to looking for evidence that conflicts with your way of thinking.
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