When Risk Isn’t What It Seems: Rethinking the Volatility Paradigm

This week's blogpost - https://bahnsen.co/3IOsn3v

Rethinking the Volatility Paradigm with Ishan Chhabra

In this episode of the Thoughts and Money Podcast, host Trevor Cummings and his colleague Blaine Carver welcome guest Ishan Chhabra to discuss his article, 'When Risk Isn't What it Seems.' They explore the traditional views of risk and volatility in finance, highlighting the differences between individual and institutional perspectives. The conversation delves into emotional biases, the importance of understanding one's own risk tolerance, and how financial advisors can help clients navigate these complexities. They also touch on strategies like dollar cost averaging, the concept of loss aversion, and the benefits of having a diversified portfolio. Throughout the episode, the trio emphasizes the value of personalized financial planning and the role of experienced advisors in helping clients make informed decisions.

00:00 Introduction and Guest Introduction

00:31 Overview of the Article: Rethinking Risk

01:03 Institutional vs. Individual Risk Perception

02:08 Behavioral Economics and Risk

03:47 Volatility and Time Horizon

04:36 Real-Life Analogies of Risk

06:19 Financial Advisory and Risk Management

09:35 Emotional Biases in Investing

14:57 The Role of Financial Advisors

20:52 Investment Strategies and Risk Mitigation

25:19 Conviction in Investment Decisions

26:09 Understanding Inflation and Long-Term Risk

27:03 Customizing Financial Plans

31:09 The Importance of Diversification

32:39 Human Behavior and Financial Decisions

33:03 Balancing Emotional and Mathematical Aspects

37:00 Personalizing Financial Advice

42:33 Balancing Risk and Reward

49:13 Concluding Thoughts and Listener Engagement

Links mentioned in this episode:

• http://thoughtsonmoney.com
• http://thebahnsengroup.com