The Martial Arts of Behavioral Finance

Protect, Live, Dream

Odysseus, the Greek king of Ithaca, is best remembered for his arduous 10-year journey home after the Trojan War, as well as the Trojan Horse he used to gain surreptitious access to enemy fortifications. As the protagonist in Homer's epic, The Odyssey, and returning character in The Iliad, Odysseus is painted as a fierce warrior whose strength matched only his cunning. And while Odysseus may be best remembered as a warrior, perhaps his most important action on his decade-long sojourn was an act of restraint rather than brute force. 

In Greek legend, Sirens were dangerous creatures that enticed sailors to come close with their beauty and enchanting music, only to lead them to shipwreck along a craggy shore. In addition to their beauty, these femmes fatale were also thought to be wellsprings of knowledge that could be harnessed for personal gain, if not for the unfortunate footnote that hearing their words led to certain death. Odysseus and his men, aware they would soon be sailing through the Strait of the Sirens, sought to capture this knowledge without succumbing to their fatal wiles. After consulting with Circes, Odysseus arrived at a solution—he would have his crew fill their ears with beeswax while he would have himself lashed to the mast of the ship. Thus, he could access the wisdom of the Sirens' song but would be unable to act in a way endangering his life. As expected, as Odysseus heard the song of the Sirens, he flailed and begged his men to be unfettered, but true to the original plan, they ignored their leader's protestations until they were safely out of harm's way. 

It is easy to paint ancient narratives like this as dusty and irrelevant to the hustle and bustle of modern life. However, Homer's story of Odysseus and the Sirens is remarkably telling when considering the Siren Song of irrational behavior that shipwrecks so many investors. Like the epic hero, we are drawn to the promise of great returns and want to charge headlong into battle. Just as Odysseus was a man of strength and action, many investors have been successful based on lives of boldness and proactivity. But in Odysseus, we find an exemplar of the ways in which sometimes the most prudent action is restraint. 

The Protect, Live, Dream solution from Orion Advisor Solutions outlines the ways a program of embedded behavioral finance, fueled by what matters most to you, can be your protection against the Siren song of irrational financial behavior. At Orion, we believe a seamless, embedded approach to goals-based investing can improve your investment experience, increase returns formerly sacrificed to misbehavior, and allow you to worry less about “the economy” as you become increasingly focused on “my economy.” 

Welcome to a new way of investing, a new paradigm for conceptualizing wealth, and a system of turning emotion from your portfolio's worst enemy to its best friend. In fact, this is one of the simple secrets of goals-based investing. It takes our natural emotionality about money and frames it in a way serving our purposes. 

Read our full whitepaper, Protect, Live, Dream: The Behavioral Benefits of Goals-Based Investing, here

  • For more resources, visit the Behavioral Finance Resouce Library here.  
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dr-daniel-crosby-1Daniel Crosby, Ph.D., is the chief behavioral officer at Orion Advisor Solutions. He is a psychologist and behavioral finance expert who helps organizations understand the intersection of the mind and markets. He is a co-author of a New York Times best-selling book, Personal Benchmark: Integrating Behavioral Finance and Investment Management. He also constructed the “Irrationality Index,” a sentiment measure that gauges greed and fear in the marketplace from month to month. His ideas have appeared in the Huffington Post and Risk Management Magazine, as well as his monthly columns for and Investment News. Crosby was named one of the “12 Thinkers to Watch” by and a “Financial Blogger You Should Be Reading” by AARP. He earned BS and PhD degrees in psychology from Brigham Young University.

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