What you only think you know can definitely hurt you — and cause you to lose a lot of money in the market.

The reality is most of us do not consistently make excellent financial choices on our own, in a vacuum. Part of the problem is that we’re plagued by misconceptions around money and the market, and we act on faulty information.

Start to solve this problem by educating yourself on the real deal and understand what’s really going on when we talk about things like diversification, index funds, the S&P 500, portfolio performance, and more…

…including what might be the biggest misconception of them all: that you definitely know what you’re doing and make great financial decisions all the time.

Jump into the episode here:

Further Reading & Resources

• For more info on why the S&P 500 is not the end-all-be-all in investing, you can take a look at this basic article from the Balance: Total Stock Market vs S&P 500. The point? The S&P 500 is just part of the total market. That doesn’t mean invest in it! But make sure you are clear on exactly what your portfolio consists of and what that actually means.
• Predictably Irrational by Dan Ariely (friendly reminder that we encourage folks to borrow books from libraries! We’re huge fans of our Boston library system and borrowing saves us literally hundreds of dollars each year. Kali reads. A LOT.)
• Check out the “computer game doors” study, conducted by Ariely — it’s actually titled “Keeping Doors Open: The Effect of Unavailability on Incentives to Keep Options Viable.”
• The Righteous Mind: Why Good People Are Divided by Politics and Religion by Jonathan Haidt.
• You can also check out this excerpt from another podcast, where Haidt talks about the analogy of the elephant and the rider (from the perspective of morality).

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