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.
“More Money, More Success, More Stuff? Don’t Count on More Happiness” 20160725 NYT
Are you on a hedonic treadmill?
“Why I Don’t Make Financial Decisions on My Smartphone” 20160325 NYT
The issue is not the technology.
“Why We Think We’re Better Investors Than We Are” 20160325 NYT
The article doe not answer how to overcome these factors. Is being aware enough?
“How Investors Sabotage Their Own Performance” 20141219 WSJ
Most people think they are the exception and ignore this type of article. If you ignore your biases (and this type of article) you do it at your peril.
“Your 401(k) Is Healthy. so Maybe You Are, Too” NYT 20140816
“people who are good at planning their financial future are more likely to take steps to improve their physical health — and then actually become healthier.”
