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In this episode of the Bryan Foltice Behavioral Finance Podcast, Dr. Bryan Foltice discusses the controversy surrounding Dave Ramsey's recommendation of an 8% retirement withdrawal rate. He critiques Ramsey's approach, highlighting its potential risks and compares it with the more conservative 4% rate commonly advised by financial planners.

Dr. Foltice delves into the importance of considering sequence risk and advocates for a balanced, flexible strategy to ensure financial stability throughout retirement. The episode aims to provide financial insights and foster informed decision-making among listeners.

00:00 Introduction to the Podcast
00:35 Critique of Dave Ramsey's Advice
01:41 Personal Experience with Financial Peace
03:58 Long-term Financial Planning
06:23 The 4% Rule and Retirement Puzzle
14:28 Sequence of Returns Risk
19:49 Finding a Middle Ground
22:09 Conclusion and Next Steps

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In this episode of the Bryan Foltice Behavioral Finance Podcast, Dr. Bryan Foltice delves into foundational concepts of behavioral finance. He revisits prospect theory, emphasizing our differing sensitivities to gains and losses, and introduces the disposition effect - our tendency to sell winning stocks too early and hold onto losing stocks too long.

Dr. Foltice shares personal anecdotes and research findings, including a study on the efficacy of trailing stop loss orders in minimizing the disposition effect and improving investment strategies. Tune in for more insights and practical advice on making smarter financial decisions.

00:00 Introduction to the Podcast
00:23 Overview of Today's Topic
01:40 Understanding Prospect Theory
04:30 The Disposition Effect Explained
07:35 Personal Anecdotes and Lessons
08:41 Research and Strategies to Mitigate the Disposition Effect
11:26 Practical Application of Trailing Stop Losses
14:17 Conclusion and Final Thoughts

References:
"Are Investors Reluctant to Realize Their Losses?" Terrance O'Dean Journal of Finance https://faculty.haas.berkeley.edu/odean/papers%20current%20versions/areinvestorsreluctant.pdf

"Exploring the Effectiveness of Trailing-Stop-Loss Strategies for Individual Investors" by Steve Dolvin and Bryan Foltice - Journal of Beta Investment Strategies Journal. https://www.pm-research.com/content/iijindinv/14/1/29

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Bryan Foltice Behavioral Finance Website - www.bryanfoltice.com
Instagram - www.instagram.com/bryanfoltice
Linkedin - https://www.linkedin.com/in/bryan-foltice-2578a116/
Disclaimer: www.bryanfoltice.com/cv

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Behavioral Finance Explains: Why Americans Misunderstand the Economy

In this episode of the Bryan Foltice Behavioral Finance Podcast, Dr. Bryan Foltice discusses a U.S. survey revealing widespread economic misconceptions among Americans. Key findings show that many Americans believe the economy is shrinking, the stock market is down, and unemployment is at a high, contrary to actual data showing economic growth, stock market highs, and low unemployment rates.

Foltice explores the reasons behind these misconceptions, including a lack of stock market participation and the impact of confirmation bias, and emphasizes the potential political motivations behind misinformation. He also raises concerns about future economic and real estate market stability given the high percentage of people living paycheck to paycheck.

00:00 Introduction to the Podcast
01:27 Survey Findings on American Economic Perceptions
03:09 Disconnection Between Perception and Reality
05:45 Living Paycheck to Paycheck in America
08:29 Impact of Inflation and Interest Rates
11:09 Concerns About Unemployment and Future Recession
14:22 Conclusion and Final Thoughts

Support the Show.

Bryan Foltice Behavioral Finance Website - www.bryanfoltice.com
Instagram - www.instagram.com/bryanfoltice
Linkedin - https://www.linkedin.com/in/bryan-foltice-2578a116/
Disclaimer: www.bryanfoltice.com/cv