The framework of investing a dollar and then earning a succession of pennies is ubiquitous. But it has limitations. A recent bank scam in India illustrates this point, writes Shreenivas Kunte, CFA.
The preference for cures over prevention is an alluring trap, writes Shreenivas Kunte, CFA, in Weekend Reads from India. Economists have a name for this well-known behavioral trait: time inconsistency.
An unorthodox solution to the US retirement crisis from Sloane Ortel; a discussion of Nobel laureate Richard H. Thaler's contributions to economics by Lauren Foster; and an analysis of the value of self-awareness by Jim Ware, CFA, are among the top EI posts from October.
Richard H. Thaler, the US economist who elevated the word “nudge” from transitive verb to political catchphrase, can now add “Nobel laureate” to his impressive biography. Lauren Foster discusses Thaler's contributions to the field of economics.
Where do we stand today from a market sentiment perspective? And how does one assimilate sentiment and crowd psychology and use it to make informed, intelligent investment decisions? Greg Blotnick, CFA, explains.
Much of the content on behavioral finance carries with it an unnecessary negative spin. Behavioral biases are cast as illogical and counterproductive, potentially even disastrous. And they can be. But behavioral patterns are also useful anchors for successful investment decision making. So we asked readers of CFA Institute Financial NewsBrief which behavioral bias was the most useful.
If it wasn’t for the impulsive, overconfident, irrationally exuberant, cognitively biased masses and their quirky behavior, we would have no markets at all.
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