Debunking the Action Bias
At times like these, investors often wonder whether they should react to the market correction. The newest member of our gang here at TWM, Jordan Gentile, played goalie on his college soccer team. In our e-Letter this month, he offers this interesting analogy about how goalies tend to react when they face the ultimate pressure situation, a penalty kick. Most goalies “feel” like they need to do something, jump to the right or the left, to try to stop the shot. But statistics show they would be better off if they just stayed put in the middle.