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Investing in the financial markets has always been a challenging endeavor, and the uncertainty brought about by the pandemic has only exacerbated the complexities. For many investors, the constant barrage of news and market fluctuations can be emotionally overwhelming, leading to hasty decisions that may not align with their long-term goals. In this episode, we explore the concept of behavioral investing, shedding light on how emotions can influence financial decision-making and how to navigate this stormy terrain successfully.

Understanding the Assumptions of Financial Success

In this episode’s call-in question, a concerned investor facing the current market turbulence, sought guidance on how to make sound choices amidst the daily news affecting the market negatively. To address her question, Joe Maier, an attorney and Director of Wealth Strategy at Johnson Financial Group, delves into the assumptions of financial success that investors often make. While investment performance is typically considered the most critical factor, Joe emphasizes that tax minimization and behavioral aspects also play crucial roles.

The Power of Behavioral Finance

Behavioral finance studies how human emotions and biases influence financial decisions. Joe highlights that our brains are wired to respond emotionally to situations, and this tendency can impact investment choices significantly. Key behavioral biases include loss aversion, regret aversion, and herd mentality. Investors tend to fear losses more than they enjoy gains, regret losses caused by their decisions, and follow the crowd to avoid pain.

Reframing the Approach: A Biographer, Analyst, and Coach

To navigate the emotional complexities of investing, Joe suggests engaging with a financial advisor who embodies three crucial roles: a biographer, an analyst, and a coach.

Biographer: A financial advisor should seek to understand the investor's story, motivations, and what truly matters to them. By focusing on the "why" rather than just the "what" of financial planning, a biographer builds a strategy that aligns with the investor's values and aspirations.

Analyst: An effective advisor serves as an analyst, stress testing the financial plan to account for various scenarios, including turbulent market conditions. By stress testing, the advisor ensures that the plan remains robust and resilient even in adverse situations.

Coach: A coach not only advises but also empowers and motivates investors to stay the course, even in the face of emotional turmoil. The coach acknowledges and understands the investor's fears and concerns while guiding them toward disciplined behaviors that align with their long-term objectives.

The Importance of Recasting Losses

Joe suggests recasting the perception of losses by focusing on what truly matters in life. Financial decisions should be driven by the desire for impact, fulfillment, happiness, and success, rather than just accumulating wealth for its sake. By understanding one's values and goals, investors can build a financial strategy that withstands emotional turbulence and keeps them on track to achieve their objectives.


Navigating the financial markets requires more than just number crunching and investment performance analysis. Behavioral investing emphasizes the significant influence of human emotions and biases on financial decision-making. To achieve lasting financial success, investors need to recognize the power of behavioral finance and work with financial advisors who embody the roles of biographer, analyst, and coach. By understanding their values, motivations, and aspirations, investors can build a strategy that aligns with their life goals, allowing them to weather any market storm with confidence and resilience. Remember, it's not just about chasing wealth; it's about finding fulfillment and happiness through sound financial planning.

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Luke Kasten
Luke Kasten, VP Private Banking Regional Manager, Milwaukee, WI

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