Retire With Style

Episode 174: The Psychology of Investing: Understanding Market Reactions


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In this episode of Retire with Style, Wade Pfau and Alex Murguia sit down with Dr. Daniel Crosby, a leading voice in behavioral finance, to unpack the psychological side of investing in today’s volatile markets. Together, they examine how market swings and media noise shape investor behavior—and why having a thoughtful media diet and disciplined decision-making framework is more important than ever. This conversation lays the foundation for next week’s episode, where the discussion will shift toward deeper questions of wealth and meaning. Listen now to learn more!

 

Takeaways

  • Market volatility can trigger anxiety—even among professionals.

  • It's normal to feel fear during downturns, but those emotions don't have to drive your decisions.
  • Limiting exposure to financial news may help you stay focused and make better choices.
  • Recognizing the incentives behind financial media can help you consume it more critically.
  • More information isn’t always better—clarity often comes from less, not more.
  • Patience matters. Reminding yourself that “this too shall pass” can be grounding.
  • Uncertainty often causes more stress than bad news itself.
  • Taking time to reflect before acting can lead to better financial outcomes.
  • We tend to give others better advice than we give ourselves—pause and consider what you’d tell a friend.
  • Automation and structured plans are powerful tools to reduce emotional decision-making.
  • Chapters

    00:00 Introduction to Behavioral Finance and Market Volatility

    02:56 Understanding Market Reactions and Investor Psychology
    06:01 The Impact of Media on Financial Decision Making
    08:47 Navigating Uncertainty in Financial Markets
    12:05 The Importance of Patience and Discipline in Investing
    15:03 Frameworks for Better Financial Decision Making
    17:55 Conclusion and Transition to The Soul of Wealth

     

    Links

    The Retirement Planning Guidebook: 2nd Edition has just been updated for 2025! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/

    This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

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    Retire With StyleBy Wade Pfau & Alex Murguia

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