Behavioral Factors in Private Wealth Management

In private wealth management, understanding clients' behavioral factors plays a pivotal role in advising them on their investment choices. Recently, a private wealth manager, Sarah, has been observing her client, Robert, who tends to display overconfidence during market upswings. Robert often dismisses the risks associated with his heavy equity exposure and believes he can time the market effectively. He has shown a consistent pattern of buying into popular stocks during bull markets and selling during downturns, believing that he can avoid losses through improved timing.

As Sarah strategizes to ensure Robert’s portfolio is adequately balanced and resilient against market volatility, she considers how his overconfidence might influence his investment strategy. She also reflects on how regret aversion might affect his willingness to hold onto assets that have underperformed.

Which behavioral factor should Sarah prioritize to effectively guide Robert's investment decisions moving forward?