In the horse-and-buggy days, it was common to put blinders on your trusty steeds. It helped them narrow their frame of reference to the job at hand … or at hoof.

Even today, blinders remain a great strategy for those Budweiser Clydesdales. But for us humans, a similar behavioral bias known as narrow framing is more likely to knock us off-course than keep us sensibly invested.

What am I talking about? UCLA’s behavioral economist Shlomo Benartzi recently published an insightful Wall Street Journal piece on the subject. In it, he describes narrow framing as “a tendency to see investments without considering the context of the overall portfolio.”

Benartzi explains:

“The first [narrow framing] mistake involves people taking too little risk, which often leads to lower investment returns. When we engage in narrow framing, we tend to focus on short-term losses. … The second mistake involves people taking on too much risk without realizing it. When we don’t think about our entire portfolio, it’s easy to overlook the fact that many of our different investments might fall or fail for similar reasons.”

In other words, overly narrow framing can result in ignoring instead of accurately assessing your own and the market’s landscape of inherent risks and potential rewards. You end up investing like a horse with blinders on – but nobody is steering the cart.

Fortunately, Benartzi offers a few practical solutions, which just happen to coincide with our way of doing business here at Hill Investment Group.

“Rely on information that reflects the biggest possible picture,” he advises, but “remember not to look at it too often.” Sounds a lot like our motto: Take the Long View®, don’t you think? Helping families view their big picture is core to our approach.

Benartzi also notes that today’s aggregation software – like our recently released HIG’s Client Portal – makes it easier than ever to see the grand scheme of things at a glance.

If you’ve never had the chance to catch the Budweiser Clydesdales in action, I recommend it highly. (No, a Super Bowl commercial doesn’t count.) But when it comes to your investments, let your advisor and today’s technological tools help you eliminate your narrow-framing blinders. Being blinded will only lead you astray.

We’ve said it before, and we’ll say it again: Individual investors become their own worst enemies when they choose to play in financial markets instead of investing in them.

But here’s an interesting wrinkle. In one of his recent posts, Wall Street Journal columnist Jason Zweig shared a seemingly contradictory stat on that, in which do-it-yourself investors came out ahead of their advisor-assisted counterparts.

What’s up with that? Are we wrong??

Let’s take a closer look at the case. Zweig’s illustration compares investor experience in two virtually identical Fidelity biotech funds – except one is designed for direct investment and the other caters to investors being served by financial advisors.

You’d expect those who invested directly would engage in ill-advised market-timing and more severely underperform what the fund actually returned, compared to those who were advised to patiently buy and hold. Instead, investors in the advisor-tailored fund did worse in Zweig’s illustration. How come?

The illustration Zweig used may well have been a case of some market-timing investors getting lucky during a specific timeframe. But another culprit to consider may be the “advisors” recommending the advisor-tilted fund.

Zweig describes: “Not all advisers chase performance, but all too many still do. Buying what’s hot and dumping what’s not, they are no less human than their clients.”

In describing what a good advisor should be doing for you, Zweig quotes Dimensional Fund Advisors’ co-CEO Dave Butler: “Advisers [should] provide a human element that gives clients confidence and comfort in not deviating from a plan.”

Zweig elaborates:

“[Y]ou should hire an adviser not for his or her investing prowess, but to help organize your finances, prioritize your goals, minimize your taxes, and navigate the shoals of retirement and estate planning. Done right, those services can make you far richer — and happier — than the pipe dream of investment outperformance is likely to.”

In short, we believe a good advisor should help you avoid, not enable, your “worst enemy” tendencies. Plus, they should be even more disciplined than you are at ignoring any market-timing habits and stock-picking cravings to which they themselves may be vulnerable.

The defense rests.

Pursuing an evidence-based approach to investing (as we do) includes hearing from those whose thoughts align with ours as well as those who challenge our assumptions. In that spirit, one of my recent reads was “A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market,” by Edward Thorp.

That’s a big book title, from a larger-than-life author. Even if he spiced up his story with a few potential exaggerations, Thorp obviously is one of the most brilliant people you may never have heard of.

A childhood genius and young math professor turned Vegas gambler turned hedge fund manager, Thorp knew his way around the data analysis block, warning a client about Bernie Madoff’s fake trades before the news went public.

He also suggests he scooped Nobel laureate Myron Scholes and collaborator Fischer Black on their insights into how to price options and other financial risks. The implication is that Nobel prize would have been his, had he played his cards right. He doesn’t say how much he earned over his career, but in the the book, he states that Citadel Investment Group was built using his market-neutral strategy, and the managing partner was worth $5.6 billion at last count.

Then there were his casino-beating tactics – employing statistical analysis to tilt the odds in his favor, plus a few tricks up his sleeves to stay in the game (such as wearing disguises once the casinos were onto him). I found this portion of the book the most entertaining.

But what about his investment advice? If anyone could crack the code on how to consistently beat the market, you’d think it would be Edward Thorp. Instead, when he tried his hand at active stock-picking, he soon discovered the same thing we did: Stock-picking advice is worthless, after-the-fact news.

The conclusions Thorp drew from there differ from our own. One of his chapter titles says it all: “Wall Street: The Greatest Casino on Earth.” While Thorp tries to apply some of his casino-beating tactics to pursue statistically significant edges over the market, we feel there’s more compelling evidence suggesting long-term investors are better served with a less dicey approach.

“A Man for All Markets” is a fun summer read for peeking inside the mind of a mathematical whiz with a flair for living and investing on the edge. When it comes to managing your money for all markets, we continue to recommend evidence-based investing.