Dopamine Is Killing Your Retirement, LFG Daily - November 10, 2025

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Recency Bias: How Dopamine and Technology Are Wrecking Your Financial Decisions

The Modern Trap: Living in the Now, Forgetting the Long Game

We live in a world that thrives on immediacy. Every scroll, click, and notification gives us a quick hit of dopamine — the brain’s reward chemical. And while technology has connected us in incredible ways, it’s also rewired our brains for short-term gratification. The result? A generation of investors and consumers increasingly falling victim to recency bias — the tendency to give disproportionate weight to recent events when making decisions about the future.

In financial terms, this bias is toxic. It leads people to chase hot stocks, panic during market dips, and abandon long-term strategies that actually build wealth.

What Is Recency Bias — and Why It’s Dangerous

Recency bias makes us believe that what just happened will keep happening.

• When markets are up, investors assume they’ll stay up forever.

• When markets drop, fear takes over and people sell at the worst possible time.

• When a new technology or crypto trend explodes, everyone rushes in thinking they’re “early.”

It’s not logic — it’s emotion. And today’s environment of constant stimulation only amplifies it.

In the past, investors got their market news once a day from the evening paper or the nightly news. Now, it’s every second. Every tweet, every headline, every chart update triggers emotional reactions — and the brain’s chemical cocktail of fear, greed, and dopamine does the rest.

Dopamine, Phones, and the “Now” Economy

Smartphones are powerful tools, but they’re also behavioral conditioning machines. Social media algorithms are built to exploit dopamine loops — rewarding users for quick engagement, novelty, and emotional intensity. The same loop drives financial decisions.

You check your portfolio dozens of times a day because it feels productive — but it’s not. It’s the same brain circuit that keeps you refreshing Instagram or checking notifications. And when investing becomes emotional instead of strategic, you start reacting instead of planning.

In other words: your phone might be costing you your financial future.

How Recency Bias Shows Up in Your Financial Life

1. Chasing Trends Instead of ValueYou buy what’s hot because it feels good — until it doesn’t. Whether it’s meme stocks, crypto, or AI plays, many investors jump in after the easy money has already been made.

2. Bailing During VolatilityMarkets dip, and your brain screams “Get out before it’s too late!” The reality: market corrections are normal. The average investor’s biggest losses come not from market declines, but from panic selling.

3. Ignoring Long-Term GoalsYou might have a retirement plan, but if your attention span is tied to social media cycles, it’s easy to get distracted by “what’s happening now.”

4. Overreacting to News HeadlinesEvery economic report, Fed comment, or election result feels world-changing. But over the course of a 30-year investment horizon, none of them matter nearly as much as discipline and consistency.

   
   

The Antidote: Slow Down, Zoom Out, Think Decades — Not Days

If dopamine and technology have shortened your time horizon, you need to deliberately fight back. Here’s how:

• Automate Your Investing: Set up recurring investments so your emotions don’t get in the way of your strategy.

• Limit Your Market Checks: Once a week is enough for most people. Your portfolio isn’t a social media feed.

• Use Data, Not Drama: Filter your news sources and stick to fundamentals. Ask: “Does this change my long-term plan?”

• Build a Real Financial Plan: A strong plan acts like a compass in a storm. It reminds you of where you’re headed when the world gets noisy.

• Practice Patience: True wealth is built in decades, not dopamine hits.

  
  

Final Thought: The Wealthy Think Long-Term

The difference between those who build wealth and those who don’t often comes down to one thing — time perspective. Technology has shortened attention spans, but the principles of wealth haven’t changed. Compounding, discipline, and patience still win.

The world is speeding up, but your success depends on your ability to slow down — to think beyond the latest headline, the latest fad, and the latest market move.

Because in the end, recency bias may be the most expensive addiction of all.

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

Colin Symons, CIO Lloyd Financial Group

UMich Consumer Sentiment showed people aren’t happy, with the index at 50.3 vs. est. 53.2, a 3Y low. On the bright side, long-term inflation expectations fell from 3.9% to 3.6%.

The Atlanta Fed GDPNow estimate stayed at 4%.

On Sunday, reports have enough Democrats backing a plan to reopen the government until the end of January. It will reverse the firing of furloughed officials, fund programs, but not extend Obamacare subsidies, which will be voted on in December. That seems like exactly what was offered weeks ago. We still need a vote on the continuing resolution. All this is going to take some time. Maybe finished on Wednesday or Thursday?

Treasury Secretary Bessent said Trump’s talk of a $2K tariff check to people could come in the form of tax cuts. I’d think markets would be nervous about just handing checks to people, unless we really like inflationary impulses.

Chinese CPI was 0.2% Y/Y vs. est. 0%. Good news, as the fight there has been about deflation.

BoJ Summary of Opinions said they expect to keep raising rates as the economy and pricing improves.

Boeing (BA) recommended grounding MD-11 freighter planes following a crash of a FDX plane in Louisville.

Taiwan Semi (TSM) reported slowing growth in October, admittedly compared to huge growth the previous year.

Looking it up, apparently the apple-throwing trees in the Wizard of Oz both weren’t in the book and don’t have a formal name. Nonetheless, they seem like an apt image for my ‘Shaking the Tree’ idea, where the market is volatile but going nowhere, shaking out short-term bulls and bears alike. In my mind, we’ve seen a bit over a month of tree-shaking, and it’s seemed a bit aggressive, of late, with some stocks hit pretty hard.

To repeat, if you wanted to worry about short-term moves, early October was the time to do it. I’d said you want to be pretty comfortable with what you’re holding, as some volatility was a reasonable expectation. As it turns out, that volatility was a bit worse and longer lasting than I was expecting, probably because the problems, such as government shutdown, were also bigger and longer lasting than I expected. In markets and in life, variability is to be expected and prepared for.

Shaking the tree is what markets do during uncertainty. Weak holders and late buyers get shaken out, setting the stage for healthy upside. This still looks like a short-term positioning unwind, to me, albeit a fairly bad one aided by a surprise lack of liquidity.

The question is if this can morph into something worse. I admit, and as clients know, thus far I haven’t added to our initial risk allocation, which certainly seems like a good idea, so far. We’ve had the traditional short-term fade of bullish factors, starting with volatility and moving averages breaking. However, we’ve also seen some internals in the market deteriorate, which is an early sign of potential fundamental worries.

I want to underline that this fundamentally based stress made it much harder to proactively add risk. When Powell indicated they may not cut rates in December, the market started to price out the cut, raising rates. That rise in rates is a break on a market that’s also short on liquidity from the government shutdown.

My opinion is that this all works out. The government should reopen, likely soon, and liquidity should come back, and that idea is looking very good tonight. We’ve already seen the dollar relax a bit, repo market usage fall back down, and SOFR spreads relax. However, it’s possible this stress continues and gets worse, and we’re at a point where I think it would be overly aggressive to add risk until we see an actual improvement. Even if lasting rate stress isn’t the most likely outcome, it’s sufficiently possible that it has to be respected.

That means we’re not going to catch the bottom of this move, but if these risks continue, the bottom could be notably lower than here. We’re exclusively in longer-term positions and I don’t mind holding them through this tree-shaking. However, I need to see the conditions that are causing the shaking to trend better before I’d add more risk.

Since I wrote the first draft of this on Friday, it looks like there are now enough Democrats willing to vote for what seems to be very similar, if not identical, to the initial offer. Fired officials will get their jobs back, programs will be funded, and Obamacare subsidies will be voted on at a later date. The Continuing resolution still needs voted on but it appears this is a done deal.

This government reopening is what I was looking for to get the shaking to stop. However, this has been going on long enough to cause real impact, and it may take some time to heal. For now, I’m seeing an improvement in conditions, not deterioration, but that can change. As always, it’s good to have a plan for ahead of time. As it is, we’re likely to add risk soon.

What does it all mean? Government reopening now looks very likely, but it will take time to both conclude and undo the damage created.

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

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