Which Biases Should You Protect Against?

September 24, 2019
Scientists and researchers have identified over a hundred cognitive and emotional biases, but which ones are most likely to affect you? It partly depends on your age.
Transcript Open new window

Which generation is more prone to herding—millennials or Generation X? Should anchoring bias worry baby boomers or younger investors more? In this episode, Mark Riepe is joined by Omar Aguilar, chief investment officer for equities at Charles Schwab Investment Management and an expert in behavioral finance. Mark and Omar discuss the results of a survey that identified the biases most prevalent among baby boomers, Gen X, and millennials.

  • This study from the Journal of Financial and Quantitative Analysis tests the implications of anchoring bias associated with forecasting earnings per share.
  • Another study from Information Systems Research examined the role of confirmation bias in virtual communities such as stock message boards.
  • You can learn more about nosology and the classification of diseases in this article.

Subscribe to Financial Decoder for free on Apple Podcasts or wherever you listen.

Financial Decoder is an original podcast from Charles Schwab.

If you enjoy the show, please leave us a rating or review on Apple Podcasts.


Learn more about behavioral finance. 

How Does Retirement Planning Differ for Freelancers?

What options do freelancers have to get the most benefit out of their retirement savings?

How Can You Build Your Pre-Retirement Checklist?

What do you need to take care of in the handful of years, months, and days before you retire?

Should You Pay Off Your Mortgage Before You Retire?

If you are nearing retirement, does it make sense to pay off your mortgage in advance?

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Investing involves risk including loss of principal.

Digital currencies, such as bitcoin, are highly volatile and not backed by any central bank or government. Digital currencies lack many of the regulations and consumer protections that legal-tender currencies and regulated securities have. Due to the high level of risk, investors should view Bitcoin as a purely speculative instrument.

This is for general informational purposes only and is not intended, nor should it be construed, as tax, investment or legal advice. Consult with your legal counsel and tax advisors about your particular circumstances.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.