Building wealth is supposed to be like watching paint dry.  Boring.

Successful strategies are tried and true.  Save, invest wisely, mind your spending, live within your means, etc.

Yet sadly and all too often we hear from clients and prospects about so-called strategies that are nothing but self-defeating behaviors and attempts to add excitement where none is called for:

“My brother-in-law works for XYZ and he says…”

“My neighbor is in and out of the market twenty times a day…”

“Our corporate banker says I ought to take a look at ABC because…”

Some of these prove successful owing to the law of averages, the broken clock theory or dumb luck.  Mostly they are a disaster.  As John Maynard Keynes famously pointed out, “The market can stay irrational longer than you can stay solvent.”

Investing fads come and go.  How many of these did you fall for?  How many did you regret not being able to get in on only to breathe a sigh of relief in hindsight?

Regret.  That’s the real issue.  Behavioral finance suggests one of our greatest fears is feeling like we missed out on something.  Humans are programmed to avoid the pain of it.

To help understand the devastating impact emotions have on financial behavior and decision-making here’s some light readingfor the upcoming August beach vacation.