By H. Kent Baker and Victor Ricciardi
The European Financial Review
Feb 28, 2014

How Biases Affect Investor Behaviour

Why do investors behave as they do? Investor behaviour often deviates from logic and reason. Emotional processes, mental mistakes, and individual personality traits complicate investment decisions. Thus, investing is more than just analysing numbers and making decisions to buy and sell various assets and securities. A large part of investing involves individual behaviour. Ignoring or failing to grasp this concept can have a detrimental influence on portfolio performance. More...

By Tamar Satov
CPACanada.ca
January 1, 2018

Battling investment bias

For two days last October, hundreds of people waited in line at Dundas Square in downtown Toronto, snaking toward a pastel-pink pop-up booth. Those with enough patience to queue for an hour or more were rewarded with ... a doughnut. Not just any doughnut, mind you, but a gourmet variety from a local doughnut “boutique,” beautifully packaged in a rose-coloured house-shaped box.

More importantly, the doughnut was free. More...

By Herman Brodie
TCAM blog

Are Seasoned Investors Better?

At least one asset is guaranteed to enrich your portfolio this year: your investing experience. Stick at it long enough and you will encounter practically everything from start-ups to meltdowns, flashes in the pan to flash crashes, slim pickings to fat fingers. You will also discover the financial impact of earthquakes and tsunamis, of both the political and geological varieties. The wisdom of the years, one might argue, ought to make you a better investor.

Empirical evidence, reassuringly, supports this hypothesis, with one important caveat...More...

By Elizabeth Olson
The New York Times
Nov. 11, 2017

I Won the Lottery and I Need Help. No, Really!

Winning the lottery can be a bolt of amazing luck. But whether the luck lasts depends on whether lottery winners fritter away their unexpected largess or manage to achieve financial security.

When Alcario and Carmen Castellano won $141 million in California more than a decade ago, they were fortunate enough to have a financial professional in the family to advise them. More..

by Jean Chatzky
NBC News
Dec.28.2017

3 common behaviors that stifle our retirement savings

Would you rather have one marshmallow now — or two marshmallows later? It’s an iconic scenario made famous by psychologist Walter Mischel, the administrator of the 1960s “marshmallow test” measuring self-control and instant gratification. Most people go for the here and now. Swap out marshmallows with money, and you’ve got an all-too-common problem... More...

By Michelle Singletary November 10, 2017
The Washington Post

Your spending problem is all in your head — here’s why

A number of websites and mobile apps can turn you into a budgeting wizard, doing everything from downloading your banking information and allowing you to create impressive charts to alerting you when you’ve blown past your self-imposed spending limits. But after years of working one-on-one with financially challenged people, here’s what I’ve found: The source of their money troubles isn’t their lack of a cool budgeting app. And most of the time, it has nothing to do with their lack of funds. More...

By Yuval Harari
April 18, 2017
The New York Times
 

People Have Limited Knowledge. What’s the Remedy? Nobody Knows

[THE KNOWLEDGE ILLUSION
Why We Never Think Alone
By Steven Sloman and Philip Fernbach, Riverhead Books]

In “The Knowledge Illusion,” the cognitive scientists Steven Sloman and Philip Fernbach hammer another nail into the coffin of the rational individual. More...

By Christopher Robbins
October 18, 2017

Clients Say Advisors Sometimes Undermine Their Trust In Them

While most investors trust their financial advisors, many say they’ve had an experience undermining that trust.

Trust is the axis upon which an advisor-client relationship revolves, and according to “Trust and Financial Advice,” a paper from Vanguard’s Center for Investment Research, most advisors seem to be doing a good job establishing and maintaining their clients’ trust. More...

By Ben Hawkes, Business Psychologist
October 18, 2017

Entrepreneur or Narcissist?

What’s the difference between an entrepreneur and a narcissist?
It may be harder to tell than you think. In a 2016 study, researchers sent a survey to 466 business and MBA students asking them questions about their intentions to become an entrepreneur and their motives for entering entrepreneurial ventures. They also measured their standing on the "dark triad" traits - narcissism, psychopathy, and Machiavellianism - which are associated with antisocial and counterproductive behaviors. More...

By Ben Steverman
Private Wealth Magazine
October 20, 2017

'Psychopath' Hedge Fund Managers Make Less Money Than Nice Guys

In the world of high finance, it’s been an article of faith among some that the only way to succeed—or even survive—is to be ruthless. But a new study in the latest issue of the Personality & Social Psychology Bulletin suggests those money makers at the top of the food chain, hedge fund managers, could benefit from being a little less mean. More...