![]() The worst thing retirees can do is to anchor on an arbitrary number that they need in order to retire. You need at least a three-year time horizon to be invested. Or are you anchored because you were going to sell everything and spend it right then? Well, if you were going to be spending the money, it shouldn't have been invested. You may have suspected markets were expensive, but you can't know something before it happens. If you are anchored on what your investments were worth on that one day you are going to be pretty miserable for a while. ![]() The stock market reached its all-time high on the first trading day of this year, Jan. Anchoring is a great way to get stuck holding your home way longer than you had hoped.īut anchoring doesn't just potentially cost you money, it also makes you unhappy. When you are anchored on a price, you may not only be listing your house for too much money, but you may be insulted when a legitimate buyer offers today's realistic price. Except interest rates are higher, the stock markets are down and homes are not selling as quickly as a half a year ago. You anchor on that price that you so justly deserve. Your house is nicer so you should get an even better number. Your neighbors sold their house six months ago for a really good number. You may be giving up other opportunities because you are anchored on something that doesn't actually matter. Unfortunately, the stock doesn't care what you paid for it. This is anchoring as well as loss aversion. For example, we may be anchored on the price we paid for a stock and say to ourselves that when the stock gets back to that price I'll sell it. If you reveal too much, your preconceptions may simply come back to you.Anchoring is when you may not realize that you are using irrelevant information to make decisions. Tell them as little as possible about your ideas and estimates. Avoid anchoring your advisers, consultants and others from whom you solicit information.Seek opinions from a variety of people to widen your frame of reference. Think about the problem on your own before consulting others.Try using alternative starting points and approaches rather than sticking with your first line of thought. Always view a problem from different perspectives.But becoming aware of their dangers can reduce their impact: The AntidoteĪnchors affect how virtually all professionals make decisions. In business, a common anchor is a past event or trend. While relying on such may lead to a reasonably accurate estimate of future numbers, it also tends to give too much weight to past events and not enough to other factors. Initial impressions, estimates or data anchor subsequent thoughts and judgments. ![]() When considering a decision, the mind gives disproportionate weight to the first information it receives. ![]() Making important choices is never simple, but it can be a lot easier and more fulfilling when we pay attention to where the choice is coming from. From business to personal choices, we don't have to make choices from circumstances-like the selection process of choosing from a smorgasbord. Our life choices are best when they come from a deep understanding of who we are and what our life's work is.īecoming aware of our unique identity (our assumptions/beliefs, values, vision, guiding principles and signature talents) helps us to make conscious choices. From sexuality to religion, we seek balance between the unchosen realities that anchor us (race, geography, history) and choices that liberate us. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |