Welcome to Fix It Friday, the podcast segment that simplifies financial strategies to help you make smarter decisions. In this episode, Jonathan Blau tackles a powerful psychological trap that can quietly derail even the smartest investors: hindsight bias. As global tensions rise and markets react, many people feel like “this time is different”—but is it really? Jonathan breaks down why every crisis feels worse in the moment, how our brains distort past events, and what it truly takes to make sound financial decisions during uncertain times. This episode is a timely reminder that success isn’t about predicting the future—it’s about being prepared for it.
What You’ll Learn:
What hindsight bias is and how it impacts decision-making
Why every crisis feels worse in real time
The difference between prediction and preparedness
How market volatility actually behaves over time
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Key Timestamps:
00:00 - Disclaimer and introduction
00:24 – What is hindsight bias (“I knew it all along” syndrome)
01:40 – The “rearview mirror” effect explained
02:30 – Why prediction is a myth in investing
03:00 – Emotional preparedness: what investors must expect
03:30 – Market realities: average declines and bear markets
04:15 – The importance of not interrupting compounding
04:45 – Financial preparedness: structuring your portfolio
05:15 – Why 2–3 years of cash reserves matter
06:45 – The real goal: resilience, not being right
07:15 – The “fix” for hindsight bias
07:45 – Final thoughts on uncertainty and long-term success
Key Takeaways:
Hindsight bias creates the illusion that past events were predictable when they were not
Every crisis feels uniquely severe in the moment because uncertainty is uncomfortable
Markets historically recover and reach new highs, despite temporary declines
About the Host:
Jonathan Blau is the President and CEO of Fusion Family Wealth, a fiduciary wealth management firm he founded in 2013 to help families achieve clarity, confidence, and purpose with their money. With a deep focus on behavioral finance, Jonathan teaches investors how to recognize emotional biases and make evidence-based decisions that support long-term success. A sought-after speaker in wealth management, Jonathan previously held senior roles in tax and estate planning at Arthur Andersen. He holds a BS in Finance, an MS in Taxation, and an MBA in Accounting. Based on Long Island, Jonathan is active in the local business community, supports organizations such as the Middle Market Alliance and Sunrise Day Camp, and enjoys boating with his family.
A copy of Fusion's current written disclosure brochure discussing our advisory [00:00:15] services and fees is available upon request or at www.fusionfamilywealth.com.
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It's called hindsight bias, or as I like to call it, I knew it all along. Ida,
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And now here's your host.[00:01:15]
refrain over and over again. [:
It doesn't mean that it's not painful. It doesn't mean that it won't take some time to get resolved, [00:01:45] but every crisis feels worse in real time than it looks later. Here's the reason why, because uncertainty is painful. The rear view mirror problem is what we're facing. All past crises lives safely in the rear view mirror.[00:02:00]
asn't done that yet to every [:
But at the time, they felt just as uncertain, just as uncomfortable, and just as emotional as today's [00:02:30] hindsight bias convinces us. That we saw it coming. Clarity existed, and the outcomes were obvious, but they weren't. I knew it all along isn't wisdom when someone says, I knew this would happen? What they're [00:02:45] really saying is, I'm forgetting how uncertain this felt before it happened.
e next. We don't, and that's [:
There's emotional [00:03:15] preparedness, which means investors must understand the true nature of markets, especially stocks since 1980, the s and p 500. Has experienced average entry year declines of about 15%. That means stock investors must be [00:03:30] prepared to watch 15% of their portfolios value appear to disappear every single year for any reason or no reason at all their markets, which are declines of at least 20%.
Occur about once [:
As Charlie Munger, [00:04:15] who's Warren Buffett's partner that has passed away in the last couple of years, put it. The first rule of compounding is to never interrupt it unnecessarily. Anytime we sell out of our stock portfolios 'cause of anything other [00:04:30] than the need for cash and liquidity, we are interrupting compounding unnecessarily and interfering with the likelihood of our financial goals being met.
onal preparedness. Emotional [:
This [00:05:00] significantly reduces the probability that they'll have to sell stocks to fund their lifestyle needs while the markets are temporarily down. Why do we recommend two to three years of spending? Because since 1929, stocks have gone from a peak in [00:05:15] their valuations to a trough. Say the average bear market is down 33%.
levels and then back to new [:
So invested in stocks, and then have the two to three year spending set aside. So that we wouldn't have to interfere with our stock investments during the temporary declines to support our living expenses. Preparedness not prediction is what [00:06:00] protects long-term plans, so what actually works good.
on being right. They simply [:
There are no facts about it. Successful investors develop the [00:06:30] ability to make rational decisions under constant conditions of uncertainty. So here's the fix. The next time your brain tells you, this is the worst crisis we've ever seen, and my financial situation is imperiled at a higher level [00:06:45] than it's ever been.
and all the others have. You [:
The goal is to have a plan that works before clarity ever arrives. So in closing, I want to remind everyone that hindsight bias is [00:07:15] simply this. An event that looked highly uncertain before it happened, but looks obvious only after it occurred. It creates the illusion that the world is predictable, but understanding the past never gives us the ability to predict the [00:07:30] future.
exists for moments just like [:
I hope you enjoyed this episode of Fix It Friday. If you have friends who seem overly concerned about [00:08:00] today's crisis, please feel free to share this podcast with them. You can always visit, uh crazy wealthy podcast.com and fusion family wealth.com. To access the podcast and all previous ones. You can also find them at all your [00:08:15] favorite podcast venues.
Thanks for listening.
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Disclaimer: The previous podcast by Fusion Family Wealth, LLC Fusion was intended for general information purposes only. No [00:08:45] portion of the podcast serves as the receipt of or is a substitute for personalized investment advice from Fusion or any other investment professional of your choosing. Different types of investments involve varying degrees of risk, and it should not be assumed that future performance of any specific investment or investment strategy or any non-investment related or planning services, discussion or content will be profitable.
your portfolio or individual [:
Fusion is neither a law firm nor accounting firm, and no portion of its services should be construed as legal or accounting advice. No portion of the video content should be construed by a client or perspective [00:09:15] client as a guarantee that he or she will experience a certain level of results if Fusion is engaged or continues to be engaged.
To provide investment advisory services. A copy of Fusion's current written disclosure brochure discussing our advisory services and fees is available upon request or www.fusionfamilywealth.com.
