May 2026 Blog Newsletter

Captain’s Log

Chasing Shiny Objects – Why Discipline Outperforms Hype

In the high-stakes theater of modern investing, the “bright shiny object” (revolutionary AI startup, the explosive meme stock, or the latest medical cure) acts as a siren song. It promises a shortcut to wealth, fueled by social media echo chambers and the hope of rapid gains. However, for the serious investor, the path to long-term prosperity is rarely paved with speculative bets. Instead, itis built on the “boring” but mathematically superior foundation of broad diversification and
behavioral discipline.

The Psychological Hurdles: Why We Chase the Light
Why do investors continue to abandon disciplined strategies? The answer lies in three hardwired cognitive biases that often override our rational minds.

1. The Narrative Fallacy
Humans are storytelling animals. We are far more likely to invest in a company because it has a compelling, “world-changing” story than because it has a sound balance sheet. We mistake a great narrative, like the “future of energy” or the “next big industry,” for a great investment. In the heat of the moment, an alluring story about disruption is far more persuasive than a spreadsheet of discounted cash flows.

2. FOMO (Fear of Missing Out)
FOMO is a visceral emotional response. Seeing a neighbor, a colleague, or a digital influencer claim massive gains in a speculative asset triggers the brain’s reward centers. It makes a steady, diversified 8% annual return feel like a failure. This social pressure creates a “herd mentality,” where investors rush into an asset not because they understand its value, but because they are terrified of being left behind while others get rich.

3. Recency Bias
Investors have a tendency to look at a recent growth curve and assume it will continue upward indefinitely. This is Recency Bias, the belief that the immediate past is a perfect predictor of the future. We assume that because a “hot” stock doubled last year, it is “proven” and will double again. This bias ignores Mean Reversion, the economic law that ensures outsized profits eventually attract competition, which inevitably drags performance back to the average.

The Mathematical Anchor: The Odds Are Not in Your Favor
To understand why chasing individual winners is a losing game, one must first look at the mathematical concentration of the market. Professor Hendrik Bessembinder’s landmark research revealed a staggering truth: since 1926, just 4% of the top-performing companies accounted for the entirety of the net wealth created in the U.S. stock market.

The vast majority of stocks actually fail to keep pace with a simple Treasury bill. For the investor chasing a “shiny object,” the statistical probability of picking one of those rare miracle firms while ignoring the thousands of laggards is incredibly low. Concentrating a portfolio in a few “hot” names isn’t just taking on risk; it is betting against a mathematical landslide.

Boring is Beautiful
To survive these psychological traps, an investor must pivot from being a speculator to a systematic owner of the global economy. Diversification is often called the “only free lunch” in finance because it allows an investor to reduce “unsystematic risk”, the danger of a single company or sector failing, without sacrificing the market’s total return.

The goal of a diversified index is not to pick the next winner, but to ensure you cannot miss it. By owning the entire market, you are guaranteed to own the 4% of stocks that drive 100% of the gains. This approach also lowers emotional volatility; when the “shiny object” of the year inevitably crashes, the diversified investor remains steady, preventing the panic-selling that destroys long-term wealth.

Conclusion: The Discipline of “Not Being Wrong”
Successful investing is not about being “right” once; it is about being “not wrong” long enough for the power of compounding to take effect. While chasing the shiny object offers a lottery-style allure, it carries the high probability of a permanent loss of capital.

In the end, the most “brilliant” object in any portfolio isn’t a speculative stock or a breakthrough technology. It is the discipline to stay the course, ignore the noise, and remain invested when everyone else is chasing the light. By acknowledging our own psychological biases, we move from gambling on stories to building lasting wealth.

By Dan Leonard, Portfolio Analyst and Lead Trader

Who Should Inherit Your Wealth? Planning Ahead to Protect Your Family and Your Legacy

Deciding who should inherit your wealth isn’t just a financial decision — it’s a deeply personal one. And while many people assume their intentions will be carried out without issue, the reality is that unclear or incomplete planning can lead to confusion, conflict, and even legal battles among
family members.

The good news is that with proactive planning, clear communication, and the right professional guidance, you can protect both your legacy and your family relationships.

CLICK HERE to finish reading Chris Perry’s Blog for May

OH THE PLACES YOU’LL GO!

We want to extend a massive congratulations to two very special high school graduates in the Anchor Wealth Management family!

• Jacob Fisher is the son of Grant and Antoinette Fisher. He graduated from Harlem High School. Jacob plans to attend Rock Valley College in Rockford, IL, to prepare for a job in the trades.
• Shea Ludwig is the daughter of Adam and Katie Ludwig. She graduated from Rockford Christian High School. Shea plans to attend Southeastern University in Lakeland, FL, majoring in Business.

Watching our team’s families grow and achieve such major milestones is a true joy. Wishing both of you a future filled with bright opportunities, continuous learning, and endless success. They did it with brains in their heads and feet in their shoes! These two are bound for incredible things.

🍎 Calling All Teachers! Let’s Talk TRS

Hey educators! We know that Tier 1, Tier 2, and “retirement math” can be a bit of a headache. Bring a friend and join us for a relaxed morning where we’ll break down your Teachers’ Retirement System (TRS) benefits in plain English with TRS Outreach Coordinator Sandie Benhart. No jargon, just clear steps to help you feel good about your future.

The Details:
When: July 16th @ 9:00 AM
Where: Our Rockford Office (4949 Harrison Ave)
Who: You and fellow teacher friends!

Keep an eye on your inbox for your invitation and share it with ALL your friends!