“Past performance is no guarantee of future results.” In this short piece we dive into that disclosure, some evidence behind it, why most investors still ignore it, and a common psychological bias or mental shortcut our brains exhibit that if we’re aware of, can help us make better decisions, both in the markets and outside of them.
Throughout 2023 and into 2024 the common narrative surrounding the outsized performance the largest US tech companies have enjoyed relative to the rest of the market has been their price moves are justified given their impressive underlying growth numbers. And impressive they have been.
Psychology, and more specifically, behavioral psychology has been intertwined with investing for decades, but only recently has it become more mainstream among practitioners and financial advisors. Our field and our clients are better off for it.
Yankees or Red Sox. Buckeyes or Wolverines. Tar Heels or Blue Devils. Lakers or Celtics. Vikings or Packers. Sports rivalries satisfy our human desire to belong to a community and reinforces the strength of that community through a common enemy: the other team.
In the latest LPL Market Signals podcast, the LPL Research strategists recap another relatively subdued week for stocks, discuss what the Fed’s presumed pause in its rate hiking campaign might mean for bonds, and provide some numbers that put a solid first quarter earnings season in perspective.
The platform helps advisors from initial data collection to comparisons, quotes and sales of insurance products.
