Speak the Language of Money

Speak the Language of Money Those who learn to speak the language of money usually make more of it!

12/26/2025

What Is Window Dressing? Window dressing is the practice of making financial statements, investment portfolios, or business results look better than they really are—usually right before they’re reviewed by outsiders. It’s not always illegal. But it’s often misleading.

12/25/2025

What Is a Santa Claus Rally? A Santa Claus Rally refers to the historical tendency for the stock market to rise during the final trading days of December and the first couple of trading days in January. Traditionally, this period includes the last five trading days of the year and the first two trad...

12/24/2025

Definition of Halloween Effect The Halloween Effect (sometimes called Sell in May and Go Away) is a market anomaly that suggests stocks tend to perform better during the six-month period from November through April than they do from May through October. In plain English: historically speaking, the m...

12/23/2025

Definition of January Effect The January Effect is a market pattern where stocks—especially small-cap stocks—tend to perform better in January than in other months. The theory suggests that prices rise early in the year after investors rebalance portfolios, reinvest bonuses, or buy back stocks t...

12/22/2025

Definition of Market Anomaly A market anomaly is a pattern, trend, or result in financial markets that doesn’t line up with what traditional financial theory says should happen. In plain English: it’s when the market behaves in a way that looks weird, inconsistent, or flat-out illogical—yet ha...

12/19/2025

What Is Bounded Rationality? Bounded rationality is the idea that people make decisions using limited information, limited time, and limited mental energy. Instead of finding the best possible decision, we settle for a decision that is “good enough.” The term was popularized by economist Herbert...

12/18/2025

Definition of Hot Hand Fallacy The Hot Hand Fallacy is the belief that because someone has experienced success repeatedly in the recent past, they are more likely to continue succeeding in the future—even when outcomes are largely driven by chance. In simple terms: “They’re on a roll, so they ...

12/17/2025

Definition of Gambler's Fallacy Gambler’s Fallacy is the mistaken belief that past random events influence future outcomes—even when each event is independent. In plain English: just because something has happened a lot lately doesn’t mean it’s “due” to change. This thinking shows up mos...

12/16/2025

Definition of Sunk Cost Fallacy The sunk cost fallacy is the tendency to continue investing time, money, or effort into something simply because you’ve already invested in it—even when walking away would be the smarter financial decision. A “sunk cost” is a cost that’s already been paid an...

12/15/2025

What Is the Endowment Effect? The Endowment Effect is a behavioral finance bias where people place a higher value on something simply because they own it. In plain English: Ownership makes us emotionally attached, and that attachment inflates value in our minds. Once something becomes “mine,” lo...

12/12/2025

Definition of Home Bias Home Bias is the tendency for investors to heavily favor investments from their own country while underinvesting in international markets. In plain English: we like what’s familiar. We buy U.S. stocks, U.S. bonds, U.S. real estate… and quietly ignore the rest of the world...

12/11/2025

A Simple Definition of Status Quo Bias Status Quo Bias: The tendency to stick with your current financial choices—accounts, habits, subscriptions, investments—even when changing them would clearly benefit you. It’s not laziness. It’s wiring. Your brain interprets “same” as “safe,” ev...

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