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Let us tell you about two investors, Mrs. Slow and Mr. Wild.

Mrs. Slow and Mr. Wild each have $100,000 to invest.

Mrs. Slow and Mr. Wild both said they would be very happy if they could double their investment over 10 years.

Mr. Wild sees his investment quickly rise to $500,000!

Mrs. Slow loses money early in her investment journey.

Mr. Wild begins to experience negative returns following his early success.

At the end of year 10, both Mrs. Slow and Mr. Wild have $200,000.

Both investors said they would be very happy if they could double their money over 10 years. Both achieved their goal.

Mrs. Slow is pleased with her investment returns.

So why is Mr. Wild very disappointed despite achieving his goal?

Mr. Wild’s reaction is very common.

Mr. Wild anchored his performance to his early success. Anything less than $500,000 feels like a failure.

Investing is often full of ups and downs. It’s easy to focus on the journey rather than the destination.

Anchoring is a very common cognitive bias, especially when it comes to money. Overcoming bias in financial decision making is very difficult. It requires perspective and good coaching. At TVAMP we believe helping clients focus on outcomes can provide just as much value as choosing the right investments.

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