SAN DIEGO--(EON: Enhanced Online News)--Ibis Capital, a San Diego-based independent wealth management firm that strives to be the firm-of-choice for successful families seeking to achieve financial peace of mind, has incorporated “behavioral economics” into its investment strategies. The cutting-edge approach uses cognitive dynamics to analyze, predict and reform investor behavior. Ibis Capital is among a number of advisory firms to offer this new approach, demonstrating the company’s continued commitment to assisting clients to make well-educated, informed decisions.
“Traditional finance is not enough, your behavior matters also”
Behavioral economics combines behavioral and cognitive theory with conventional economics and finance to provide explanations for why people make the financial decisions they make. It helps investors identify mistakes they have made in the past and ideally helps them avoid repeating them in the future.
“Traditional finance is not enough, your behavior matters also,” said Robert Meyer, CEO and Chief Investment Officer of Ibis Capital. “It is hard to avoid having an emotional reaction to portfolio volatility, whether it be fear and anxiety to losses, or over-confidence and elation to gains. Incorporating behavioral economics into our practice is part of our continued commitment to our clients and we currently use this approach with both current and new clients.”
According to Meyer, “Volatility in markets can increase investor angst over the prospects of financial gains. However, most of this fear can be managed through a better understanding of individual behavioral biases. Even the smartest people are affected by these biases, yet today’s investor industry is underserved when it comes to addressing these issues.”
Since 1926, the S&P 500 has had an average rate of return of approximately 10 percent1 with plenty of volatility along the way. This volatility, unmanaged, can drive costly decisions that are made out of stress or anxiety, possibly harming investor portfolios. According to Dalbar, the average investor in a stock mutual fund underperformed the S&P 500 by a margin of 8.19 percent in 20142. Behavioral economics can help protect against buying high or selling low.
About Robert Meyer
Robert Meyer serves as Chief Executive Officer and Chief Investment Officer of Ibis Capital. He is responsible for maintaining the overall direction and strategy of the firm. Robert has extensive experience deploying investment strategies for individuals who have a net worth greater than $5M. Meyer has more than two decades experience in portfolio management, is a CERTIFIED FINANCIAL PLANNER™ Practitioner, a Chartered Life Underwriter®, and a Certified Private Wealth Advisor®.
About Ibis Capital
Ibis Capital is an independent wealth management firm that offers a holistic financial planning approach to clients with additional services including advanced estate planning, tax mitigation strategies and behavioral economics. Its business model provides expanded solution offerings and the talented team required to offer top-tier service to choice clientele. Ibis Capital has approximately $350 million in assets under advisement and services approximately 95 clients, including high-net-worth families, middle market business owners, pension plans, endowments and foundations. For more information please visit www.ibiscapital.com.
Investment advice offered through Stratos Wealth Partners, Ltd., a registered investment advisor.
1 Investopedia, April 2015
2 22nd Annual Quantitative Analysis of Investor Behavior, Dalbar 2015