The Financial Planning Risks of Over- or Under-Confidence

Confidence is an important character trait. In a financial context, neither too much nor too little is optimal, as both can lead to misjudging our planning and decisions. When we are overly optimistic, we may anticipate future results that are better than likely. This can lead to risky decision-making and a failure to have contingency plans. When we are overly pessimistic, there can be other risks. While there may no such thing as universal equilibrium, a balanced assessment of the...