Overconfidence Bias

A few years ago, when our youngest son, Isaiah went off to college, I embarked upon a journey of fitness through CrossFit. CrossFit is an intense exercise philosophy and a competitive fitness sport that incorporates elements of high-intensity training, Olympic lifting, and gymnastics.

Simply put, CrossFit is shared suffering that creates strong bonds with other Cross fitters.

In my years of experience, I have come to understand two very important concepts, 1-my comfort zone is my greatest adversary and 2-there is no elevator to success. You must take the stairs!

I feel that the concepts of CrossFit are akin to investing. It is essential to have a mindset of longevity. Both require a long-term goal, a disciplined process, and the patience to endure the ups and downs.

The CrossFit coach will curate a training plan that is specific to each athlete’s fitness goal. Some athletes want to maintain their level of strength, some are recovering from injuries and need a moderate progression.

There are some who are training intensely for the World Cup of the sport- The CrossFit games. No matter the goal, each training plan is crafted with progressive and challenging milestones.

As the workouts advance, some CrossFit athletes second guess their progress, as a direct result of focusing on the strength of other athletes. This type of mentality can result in disappointment and ineffective training output.

Conversely, an athlete that suffers from an overconfidence bias might attempt more than is recommended by the coach because they overestimate their knowledge and abilities in a certain area. It is not uncommon for people of this mindset to be prone to preventable injuries.

The approach to Investing and competitive fitness are not that different- in fact they are reasonably parallel.

Understandably CrossFit is not for everyone but developing a financial plan should be.

As a professional in wealth management, I am confident in the value that a financial advisor provides in easing financial behavior biases.

As an amateur CrossFit game competitor (with an ice pack on my shoulder as I write this) I will confess that employing a CrossFit coach has kept me from my own overconfidence bias…Not all the time but we are all a work in progress!

Any opinions are those of Taylor Easley and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of the strategy selected.