‘Everybody has a plan until they get punched in the mouth’ – Mike Tyson

Robert Jeter

Originally published on the Cape Gazette’s website

By Robert Jeter

March 30, 2017

What can a prizefighter teach us about investing?

Since 1950, there have been 58 different 10-year periods measured yearly, counting the 10 years from 1950-59, 1951-60, 1952-61 through 2007-16. According to BTN Research, the S&P 500 has produced a positive total return result in 56 of the 58 decade-long periods, or 97 percent of the time.

With most things in life, everything is great until it’s not. The same can be said of investing in the stock market, especially for a retiree or near retiree. While we know that the buy and hold strategy for a long-term investor is a tried and true method of accumulating wealth, statistics such as the one above for someone who is distributing their assets can be quite misleading. Taken out of context, it can lead a retiree to take on too much risk, withdraw too much from their portfolio, or even become far too conservative in anticipation of the sky falling. What we will explore in this article are three behavioral biases that can unduly influence your investment decisions and expose your retirement plan to significant risk.

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