Behavioral Finance
The way a problem or decision is presented to the decision maker will affect their action. People often make decisions based on rules of thumb, not rational analysis. There are explanations for observed market outcomes that are contrary to rational expectations and market efficiency.
“Investing: Throw out conventional wisdom” 20111119CNNM
“…people are less emotional when it comes to making money-related decisions for others than when making moves that require their own/immediate sacrifice.”
“Why We Can’t Tell if the Market is Half Empty or Half Full” 20110709WSJ
Performance figures ignore dividend. Investors feel like they lost money after an investment increases in value and then falls back to the original purchase price. These are two explanations discussed bu Jason Zweig in his July 9th article in the Wall Street Journal.
“Once Bitten, Twice Bold: Look Who’s Buying Stocks Now“ 20110226 WSJ
“Now is no time for these investors to forget the lessons they should have learned about themselves two years ago…”
“It’s academic!” 20110218 CT
Did you know your last name provides insight into your spending habits? Did you know
Humans are hard-wired to consume immediately”?
“Savers’ impatience hinders retirement goals” 20110207 MW
Our behavior biases are largely because of the way we are “wired”.
“Patience, Please, With That Investment Plan” 20091226 NYT
“Did You Do as Well as Your Fund?” MS20090807
“Hold or Fold, But Don’t Waver” NYT20090809
“The Future of Our Illusions” (“The Invisible Gorilla”) 20100611 WSJ
“Resisting the Urge to Sell Low” 20100521 NYT
“Tax Bomb Threatens Funds” 20100515 WSJ
“When Ads Say Skill, Think Luck-Report” 20100422 WSJ
“Why Timing Isn’t an Investor Strength” 20100411 NYT
“Time to Take Stock of the Recent Market Rallies” 20100403 WSJ
