Lesson 2 Flashcards
Developmental Paragigm
- Humans progress in predictable stages over time, and issues stem from events that halted progression
- Counselors goal is to recount past experience and correct
Developmental Paradigm (Nature of Relationship)
- Moderately directive
- Alliance between client and counselor is important
- Goal is to help resolve gaps not solved for in earlier stages of development
Developmental Paradigm (Emphasis of Treatment/Prominent Theme)
- Healthy development
- Focus on past experiences and how they relate to present difficulties
- Resolution of Conflict
- Achieve understanding and self awareness
Developmental Paradigm (Skills to be used)
- Active listening
- Client Observation
- Paraphrasing
- Feeling reflection
- Reflection of meaning
- Supportive Challenging
Humanistic Paradigm
- Congruence between thoughts, feelings, and emotions
- Congruence obtained by focusing on the here and now
- Counselor feels the client knows the answer, goal is to help them express it
- Emphasizes personal responsibility
- Requires close relationship
Humanistic Paradigm ( Nature of Relationship)
- Varies from nondirective (person centered existential) to highly directive
- Alliance is VERY important and aides treatment
Humanistic Paradigm (Emphasis in Treatment)
- Experiencing present moment
- Accepting personal responsibility
- Emphasize freedom of choice
- Fully in touch with ones self
Humanistic Paradigm (Skills to be used)
- Active listening
- Client observation
- Feeling reflection
- Reflection of meaning
- Supportive challenging
Cognitive-Behavioral Paradigm
- Pavlov’s Dog
- Reinforcement (or lack of) drives behavior
- Self-talk is driver of action
- Goal is to manipulate reinforcements through intervention
Cognitive-Behavioral Paradigm (Nature of relationship)
- highly directive
- Alliance only important to help client feel engaged and willing to participate
Cognitive-Behavioral Paradigm (Emphasis on Treatment)
- Identification of behavioral excess and inadequacies
- Identification of reinforcers
- Manipulation of reinforcers to change thoughts and behavior
Cognitive-Behavioral Paradigm (Skills to be used)
- Questioning
- Reflection of meaning
- supportive challenging
Human Communication
- Words and gestures (verbal and non-verbal)
- Context is important
- Can be used to manipulate or conceal
Non-Verbal Communication
- Body language (position and movement)
- Can be incongruent with verbal (speak up if this happens)
Passive Listening
- Easily distracted
- Could be thinking about day, how to respond, other items
Active Listening
- Undivided attention
- Observing body language
- Provide positive responses to illicit more from the speaker
Open Questions
- Solicits a lengthy response
- Begins with Who, What, Where, When, Why, and How
- Be weary of “Why” as it can be non-productive and aggressive
Closed Questions
- Single word response
- Used to help clarify or obtain specific information
- Could be referred to as leading questions
Clarifying Client Statements
- Paraphrasing
- Used to confirm and align understanding
- Utilized to bridge incongruence between verbal and non-verbal
- Must be achieved before moving on in the conversation
Client Data Collection
- Need qualitative not just quantitative
- includes values, expectations, attitudes, and time horizon
- not Net Worth, but Self Worth
Traditional Finance
- “Modern Portfolio Theory”
- developed in 50’s and 60’s
- Believed, 1) Investors are rational, 2) Markets are efficient, 3) Mean Variance Theory Governs, 4) Returns are determined by Risk (Beta)
Traditional Finance - Rational Investor
- Prefers more wealth over less
- Never confused by form of wealth (i.e. Dividend over Stock Sale
Traditional Finance - Efficient Market
- Stock price reflects relevant data
- No mispricings
- Impossible to “beat” market
Traditional Finance - Mean Variance Theory Governs
- Evaluation of stock based on mean value with some variances
- Expected return vs actual return
Traditional Finance - Risk Yields Return
- More risk = greater return
- CAPM Risk Formula
Behavioral Finance
- Some truth in Traditional Finance
- Adds sociological and phycological elements
- Not everyone is the same, and has different drivers and experience
- People make mistakes
- 1) people are “normal”, 2) Markets aren’t efficient, 3) Behavioral Portfolio Theory governs, 4) Risk does not equal returns
Behavioral Finance - Investors are “Normal”
- Not rational
- have coginitive errors
- emotional
Behavioral Finance - Markets aren’t efficient
- stock price does not equal fundamental value
- Can buy at discount and sell at a premium
- Market consists of “Normal” investors
Behavioral Finance - Behavioral Portfolio Theory governs
- bucketing approach to investing
- time horizons for different assets
- less risk short term, more risk long term
- buy lottery ticket AND insurance policy
Behavioral Finance - Risk not equal to return
- Return is not solely based on the risk taken
Heuristic
- Rule of thumb
- inherent bias based on experience
Affect Heuristic
- Subconscious decisions
- good vs bad
- immediate opinion
Availability Heuristic
- Use information already known
- Don’t research
- causes outdated or uninformed decisions
Similarity Heuristic
- association with past events
- the past will repeat itself
Types of cognitive bias
- Anchoring
- Confirmation Bias
- Gambler’s Fallacy
- Herding
- Hindsight Bias
- Over Confidence
- Overreaction
- Prospect Theory
Cognitive Bias - Anchoring
- attaching to a reference point or experience even if not correlated to make a decision
- desire to adhere to security
- causes quick decisions when more research should be done
Cognitive Bias - Confirmation Bias
- Focus on information that supports your thinking
- ignoring facts to create an incomplete picture
Cognitive Bias - Gambler’s Fallacy
- A coin is more likely to land on tails after landing on heads
- not based on factual probability
Cognitive Bias - Herding
- Follow the masses
- Desire to conform
- creates overvaluation
Cognitive Bias - Hindsight Bias
- Looking at past facts and experience
- trying to predict the future with past informaiton
- belief that past events were “obvious” in looking back at them
Cognitive Bias - Overconfidence
- reliance solely on one self
Cognitive Bias - Overreaction
- Allowing new information to overly drive decisions
- greatly impacted by recent news/events
Cognitive Bias - Prospect Theory
- If same outcome people will choose to get their through a gain as opposed to a loss
- Focus on gains over losses
