Strategies for the Irrational Investor

If you are like the typical investor, cognitive biases, emotions and reactive thinking inevitably influence your decisions to some extent. The result can often be subpar portfolio returns. Some of the most obvious examples of behavioral errors are lotteries. Why do we play when the odds of winning are low? Ironically, part of the reason…

 

Responding to Market Bubbles: What You Should Do

This article originally appeared in the June 2015 issue of the AAII Journal. Robert Shiller is a Nobel laureate and the Sterling Professor of Economics at Yale University who studies market fluctuations and investor behavior. In April 2015, he spoke to AAII about stock and bond bubbles and the current market. The term “bubble” gets used…

 

Social Media Can Feed Investor Panic

Social media has become ingrained in our daily lives, but for investors, this could come at a cost. A Wall Street Journal article discusses the impact between knowing what others are thinking and the performance of one’s investment portfolio in the next market crash. The article cites a 2013 paper from neuroeconomists Benedetto De Martino and colleagues, then…