loss aversion
How does the stock market collectively respond to quality losses versus quality gains?
Loss aversion may not influence investment decision making as much as we think, says David Gal.
While behavioral finance identifies and describes cognitive errors, it provides few remedies. But, meditation may provide the answer.
This weekend approximately half of US households will be watching the Denver Broncos and Seattle Seahawks compete in the 48th edition of the National Football League’s Super Bowl. It is typically a time when stock market observers cast seriousness aside and consider what the game’s outcome will mean for equity prices by examining the Super Bowl Indicator. First proposed in 1978, this theory holds that stocks will rise in the coming year if an original NFL franchise wins, but will fall if an old AFL team wins.
As I looked back over a year of tweets and blog posts, one theme was perennial: we cannot escape ourselves. What do I mean by that? Behavioral biases inform our investment decisions, regardless of gender, season, or geography.