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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.”

“Making Choices in the Age of Information Overload” 20120515NYT
We rely on “signaling” when there is too much information, or no information, to make choices.

“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

“Volatility is Your Friend” 20100515 WSJ

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