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The 720 Report: March 2024

March 30, 2024

The 720 Report: 720 Thoughts in 120 Seconds

The most interesting conversation I heard this month was centered around behavioral finance and recency bias. Looking back to 2022, many may have felt like their world had been flipped upside down with double digit negative returns in stocks and bonds. Fear was high, and it seemed like there was nowhere safe to invest. Flash forward to the beginning of 2023, and a 5% 1-year CD or money market fund became the hottest investment of the year. Many investors, feeling beaten up after negative returns in stocks and bonds, fled to money markets.

Jump to the end of 2023, when the S&P 500 finished the year up more than 26% compared to cash at 5%. The investors who found themselves on the sidelines making 5% while equities returned 26% are likely feeling like they missed out. You don’t need to be a genius to see that making a decision based on what’s happened in the past isn’t always in your best interest, but it’s often difficult to avoid. So, what can you do as an investor to not let your recency bias cloud your judgement? Here are 3 ideas:


Idea #1: History often repeats itself. Look at what happened in the past.

Below is a graph showing the returns of cash vs. equities vs. a 60/40 portfolio after a rate hike cycle. The next time a rate hike cycle occurs, study what’s happened in the past. I think if many investors had seen this graph before they went to a 1-year CD in January of 2023, they may have reacted differently.

JP Morgan, “Guide to the Markets”, as of 2/29/2024 -



Idea #2: Be responsive, not reactive.

It is easy to react when emotions are high; it is often much harder to take time to process and formulate a response. Many parents teach their children the 24-hour rule. When making a big decision, take 24 hours to make sure you feel the same way. When dealing with a lifetime of savings, the stakes increase, so I propose the 7-day rule: Take 7 days to process, study, and ask questions. If you feel the same way in 7 days that you did on day 1, you can at least know you have made the decision as a response and not a reaction.  


Idea #3: Play devil’s advocate or ask someone else to play devil’s advocate.

Allow yourself to try and be persuaded to make the opposite decision you’ve advocated for. You’d be surprised; when we become deeply invested in something, our brains often block out sound reasoning, as we are flooded with ideas and thoughts that only confirm what we want to hear. Force yourself to listen to alternate ideas and perspectives. Are you looking to confirm your belief, or are you making an educated decision?



This article contains information and analysis derived from sources deemed reliable. However, it is important to clarify that the opinions, views, or recommendations expressed herein are solely those of the author(s) and do not necessarily reflect the views or positions of Landmark Wealth Management Group. The information presented in this document is for informational purposes only and should not be construed as personalized investment advice or a recommendation to buy, sell, or hold any securities. Past performance is not indicative of future results, and investments involve risks, including the potential loss of principal.