How a Policy Prescription Guards against Emotional Decision-making, and Leads to Positive Outcomes.
Over the past two years, financial markets and the economy have been on an unprecedented wild ride, taking investors along to experience heights of exuberance to depths of fear (and back) several times. Adrenaline rushes and roller-coaster rides are hardly what pension plan sponsors line up for. But chills and thrills was what much of 2018 through 2020 had in store for investors. We witnessed how that kind of environment can elicit strong emotion responses. And also how emotional decision-making can lead investors far afield of the outcomes they’d wanted.