Don't Let Recency Bias Derail Your Retirement Investment Strategy
Investing for and in retirement is far more behavioral than mechanical. Unsurprisingly, humans tend to respond to big, emotionally driven events. This is the very essence of recency bias: We have the behavioral tendency to assign more importance to events from the recent past, especially when it comes to investing.
Below, we'll discuss how investors are better off taking a long-term approach.
As of this writing, the S&P 500 is down 20% for the year, enough to make any retiree uncomfortable. Although the index has swung back and forth from bear market territory, many people are ready to dump stocks in an effort to preserve their wealth and avoid more pain.
Source Fool.com