What we lose in returns simply because we're human

In the quest for investment returns, classical finance theory makes little room for sentimentality. But the failure of economic theory – and the financial services industry – to fully appreciate the consequences of being human (and all the emotions that make us who we are) is one of the primary sources of poor investment advice. Estimates suggest that investors lose 2%-5% of potential returns each year simply because being human makes the principles of classical finance hard to follow. By ignoring the important role of emotions, traditional portfolio solutions end up making investo...