The Overconfidence Factor and Other Points to Ponder

Mar 29, 2022
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Take a hike

“The expectation going into this year was that we would see inflation peaking in the first quarter and maybe leveling out and then seeing a lot of progress in the second half. That story has already fallen apart. To the extent that it continues to fall apart, my colleagues and I may well reach the conclusion that we’ll need to move more quickly, and if so, we’ll do so.”

– Federal Reserve Chairman Jerome Powell on 3/21/22. He hinted that the next rate hike might be 50 basis points (0.50%). Read more at

A new world order

“I remain a long-term believer in the benefits of globalization and the power of global capital markets. But the Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades.”

– BlackRock CEO Larry Fink, in a 3/24/22 MarketWatch article. He believes companies and governments will “re-evaluate their dependencies and reanalyze their manufacturing and assembly footprints” and the reorientation of supply chains will be inflationary. Read more at

How are you bearing up?

“One of the worst parts about bear markets, aside from just the losing money part, is the false hope along the way. Violent selling leads to violent rallies that lead to even heavier selling…. Try not to get too excited on up days and too despondent on down days. The market’s gonna go where it’s gonna go and you need to preserve your mental capital.”

– Michael Batnick, in a 3/14/22 post on his blog, The Irrelevant Investor. He noted that bear markets tend to bounce their way down, which can wreak havoc with investors’ emotions. Read more at

The overconfidence factor

“Investors who are male, or above the age of 45, or married, or have more dependents, or who self-identify as having excellent investment experience or knowledge tend to freak out with greater frequency.”

– From a large-scale study of investor panic selling, referenced in a 3/24/22 blog post on The Big Picture. The study found that 31% of those who panic sell “never return to reinvest in risky assets.” Read more at

No pain, no gain

“To reap the biggest rewards you must be able to take the painful hits and keep moving forward. Which is why the ultimate superpower in investing is being good at suffering.”

– Charlie Bilello, in a 2/7/22 post on his Compound Advisors blog. He pointed out that stocks that have outperformed over the past 30 years have taken investors on a breathtakingly painful ride at times. Read more at

Written by

Matt Bell

Matt Bell

Matt Bell is Sound Mind Investing's Managing Editor. He is the author of five biblical money management books and the teacher or co-teacher on three video-based small group resources. His latest book, Trusted: Preparing Your Kids for a Lifetime of God-Honoring Money Management, has just been published by Focus on the Family and its publishing partner, Tyndale House (April 2023). Matt has spoken at churches, universities, and conferences throughout the country and has been quoted in USA TODAY, U.S. News & World Report, and many other media outlets.

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