Voices in Leadership: Behavioral Finance in Times of Societal and Financial Crises

Our Voices in Leadership conversations cover trending topics with a focus on both financial and human dynamics of today’s multi-generational families. Our guest in this episode spans both worlds.

Chief Investment Officer Rick Pitcairn reconnected in late May with renowned behavioral finance expert Meir Statman, the Glenn Klimek Professor of Finance at Santa Clara University. Meir was one of our keynote speakers at Pitcairn’s annual Wealth Momentum Client Forum.

Rick and Meir spoke about the mindsets of investors in today’s environment and why it’s important to step away from your emotions and engage your cognition when making important decisions.

Here are the topics they discussed:

2:20 – Mindsets of investors today compared to past financial crises.

4:47 – Variations of today’s decision-making competencies, defined as normal smart, normal stupid, and normal ignorant.

6:23 – Normal environment and bias of buyers and sellers

8:33 – Enhancing well-being beyond financial well-being

11:30 – Multi-levels of fear and how they impact cognitive decision-making

15:07 – What is in our control and what is not in our control


Rick and Meir also discussed how well-being is broader than financial well-being. He touches on the multiple domains and how enhancing well-being involves more than just enhancing the financial element. He’s shared a copy of his article, “Financial Advisers as Well-being Advisers,” published in the Journal of Financial Planning.