HOW MANY TIMES have you found yourself doing things you don’t want to be doing? It might be binge-watching Netflix, eating junk food or mindlessly scrolling through your favorite app. This is something we all struggle with.
Investing is no different. The behaviors we should avoid are mostly clear, but it isn’t always easy to follow through.
I remember vividly the day I joined my first employer, Chicago-based investment researcher Morningstar, as an intern a few years ago.

ON JAN. 10, 2000, America Online co-founder Steve Case stood on stage in New York to announce the largest corporate takeover in American history, buying venerable Time Warner for $165 billion. At the time, commentators called it the merger of the century. But just five years later, Case acknowledged that it was actually “the worst merger in history” and argued that it was time “to take it apart.”
Making financial decisions is difficult even in good times.

IT’S OFTEN SAID investors are driven by fear and greed. But I’d add a third item to the list: regret.
The past year and a half have been enough of a rollercoaster to rattle even the most even-keeled investor, creating ample opportunity for regret. Since the fall of 2018, the stock market has dropped 20%, gained 30%, dropped 35% and then gained 30% again. Result? Here are some of the sentiments I’ve been hearing over the past month:

“Why didn’t I sell at the top?”
“Why didn’t I buy at the bottom?”
“Why did I bother with international stocks?”
“Why did I buy high-yield bonds?”
“For the love of God,

MY PARENTS AND grandparents were forever affected by the Great Depression of the 1930s. They shunned debt, paid cash for everything, never invested in stocks and kept their modest savings in the bank, mostly in a checking account.
Following the 2008-09 Great Recession, many Americans also changed their financial ways, at least temporarily. We increased our savings rate immediately after the recession. But a few years later, we returned to our high spending ways.

WHEN I WAS IN GRADE school, I remember a field trip to a highflying local company called Prime Computer. At the time—it was the 1980s—Prime was a Fortune 500 company with a popular line of minicomputers and a runaway stock. Today, Prime is long gone and barely remembered. A Wikipedia page is about all that remains.
For a long time, I didn’t understand this. How could a company so successful simply cease to exist?

ON APRIL 14, 1988, Captain Paul Rinn was the commanding officer of the USS Samuel B. Roberts when it struck a mine in the Persian Gulf. The resulting explosion tore a 21-foot hole in the side of the frigate. Almost immediately, the ship began taking on water and multiple fires broke out.
Naval protocol for this situation was clear: Put out the fires first, then worry about patching the hull. But after just a few minutes of firefighting,

ONE OF MY FATHER’S favorite sayings was, “This too shall pass.” Recent events have made me dwell on its meaning—and wonder where the phrase came from.
It seems to have originated as a Persian adage. It was employed in a speech by Abraham Lincoln before he became the 16th president: “It is said an Eastern monarch once charged his wise men to invent him a sentence, to be ever in view, and which should be true and appropriate in all times and situations.

THE CORONAVIRUS IS prompting people to behave irrationally. They’re hoarding food, toilet paper and other goods. They’re risking their health—and that of those they know—by failing to limit their physical contact with others.
This irrationality has spilled over into the stock market. More than 30% of the U.S. market’s total value has been wiped out. It’s hard to argue that this is justified. The businesses represented by these stocks may be hit with short-term disruptions and a temporary reduction in profits.

WHEN I WENT TO THE grocery store last week, it was packed with customers stocking up on essentials. Carts were filled with items that people couldn’t possibly consume in any reasonable period of time. It’s a scene that’s been repeated across the country.
A friend told me: “When people panic, they want things right away. When people see other people panic, they panic, too.” Like the coronavirus, fear is highly contagious.
I’m not panicking,

WHILE JIM AND I cooked dinner the other night, we talked about the old cars we drove when we were younger—and how they tended to pull to one side if we took our hands off the steering wheel. We humans have a similar tendency: We head in one direction unless we make a conscious effort to be more rational.
That brings me to the coronavirus and accompanying stock market plunge. We all have gut reactions to news like this.

HERE’S THE LEAST surprising thing you’ll read this week: You can’t control the financial markets. They’re driven by news—and we simply don’t know what news we’ll get in the weeks and months ahead, whether it’s about the spread of the coronavirus, its impact on the global economy or something else entirely.
But don’t despair: There’s also much that we can control, including how much we save and spend, the amount of investment risk we take,

I’M WRITING THIS just before 6 a.m., following a few days during which world stock markets caught their own version of the flu. Frankly, I can’t sleep thinking about what’s happened—and especially about the investors who panicked and locked in their losses, just like so many folks did in late 2008 and early 2009.
It took me a few minutes to muster the courage to look at my 401(k). When I did,

HOW OFTEN DO YOU think about money? Hey, you just did. Seriously, we think about money every day and sometimes every hour. Some studies say we ponder financial matters even more often than the old standby: sex.
We’ve been thinking about the stuff for a long time. Money goes back about 3,000 years. Paper currency can be traced to China in 700 BC. They didn’t fool around: Their currency stated that all counterfeiters would be decapitated.

ONE OF MY FAVORITE movies of recent years was Hidden Figures. There’s a pivotal scene where the hero, Katherine Johnson, realizes they need to use an ancient numerical technique known as Euler’s Method to solve the trajectory equations for John Glenn’s mission. This involves breaking a complex problem into very small pieces, solving each part, and then summing them to get the solution.
Over my engineering career, I used various numerical integration techniques to solve complicated problems.

FROM AN EARLY AGE, I was amazed at the power of mathematics to model our world and solve real world problems. In engineering school, we studied a host of mathematical techniques that did just that. But I wish we’d spent more time on probability and statistics.
In 1989, I read a book that gave me a broader view of how probabilistic our world is and, at the same time, made me aware of how ill-prepared the general population is to understand these concepts.