How to tilt the investing odds in your favour

By Dan Hallett, CFA, CFP

My article in this morning’s Globe & Mail offers tips to help investors retain more of the performance available to them.  As I jotted down the first tip – write down your investment goals – I found myself writing down something to the effect of, “…many academic studies confirm the benefits of writing down your goals“.

Then it occurred to me that while I believed this to be true, I couldn’t think of a single study that actually confirmed this belief.  As I searched the Internet for a reputable reference, I quickly found that no big study exists.  A 1996 article in Fast Company magazine offers the best account of trying to track down the often-cited 1953 Yale study – concluding that it’s an urban myth.  But I did find one study.

It didn’t take my long to find a few references to Dr. Gail Matthews, a professor of psychology at Dominican University of California.  Dr. Matthews conducted a small, short-term study which supports the practice of documenting goals.  But a periodic review of goals and inserting some accountability (i.e. involving another person to hold you accountable) are important steps.  And it’s why working with a financial advisor can really help people and why so few do-it-yourselfers lack the discipline to invest successfully.