Flight #7: Highway to the Financial Danger Zone

The Danger Zone is not a specific place (I checked on Google Maps), but rather in the song "Danger Zone", Kenny Loggins describes a state of mind. In the movie Top Gun, Maverick is always in the Danger Zone. That’s what makes him one of the best pilots in his class and arguably the most epic movie character of all time. Always being in the Danger Zone, however, is also what is keeping Maverick from actually becoming the best pilot in the class. Eventually, he understands this and realizes his subconscious desire to always ‘push the limits’ is indeed holding him back. Unfortunately, this behavior leads to the death of his best friend and navigator, Goose, before he ever realizes it. We all have behavioral biases which are defined by irrational beliefs or behaviors that influence our decision-making process. As with Maverick, these biases can be extremely hard for us to recognize and can lead us to make decisions that can have devastating negative consequences. This is especially true when it comes to our financial lives. In this podcast “Highway to the Financial Danger Zone”, we talk about behavioral biases we face as investors. We discuss what these behavioral biases tend to be, how we can recognize them, and what we can do as investors to avoid allowing them to drive our decision making. “I’m not going to blow sunshine up your ass... A good pilot is compelled to always evaluate what’s happened, so he can apply what he’s learned.”