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CFA/DFW Lunch 5/10 Diane Garnick discusses Loss Aversion
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5/10/2018
When: Thursday, May 10, 2018
11:30 AM

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Dallas Luncheon:
Loss aversion is a term in behavioral economics that refers to
an individual’s strong preference to avoid losses over receiving equivalent gains. In other words, clients experience much more “pain”
from losing on investments than pleasure from gaining.

Studies have shown if a person loses $100, they “feel” like they’ve lost $200. For retirees, the pain is even worse because they have less time to recoup the losses. In this presentation, Diane Garnick will show
how investment managers can help clients avoid the feeling of loss
aversion by aligning clients’ budgeting process and monitoring of
investment results with their long-term goals and thereby framing investment
and spending conversations in a more positive light.

Economically, there is no difference in the financial results, but these techniques can make a big difference in the client’s decision-making process and in the way they feel—happier!



Diane Garnick headshot


Diane Garnick

 

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