This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day.
Behavioral finance has been at the forefront of investing for many years now, yet it is still largely misunderstood and rarely applied to investors’ actual habits. Our good friend Dan Egan has been pushing this frontier, and in this conversation we covered:
- The fallacy of trying to predict what makes us happy and how that applies to investing
- Why understanding our biases does not provide immunity against them
- Formulating incentives and nudging investors towards habits that can benefit them
- Generalizations vs uniqueness across investors
- Imagining who is trading against you – and what they might know that you don’t
We also discussed the importance of narrative and the study that suggests stories often outweigh the experiences themselves. A true session of psychoanalysis for investors!
Thank you for watching and listening. See you next week.