An article in Psychology Today discusses loss aversion, and how regulating emotion and taking a different perspective can reduce it—and “help people overcome potentially disadvantageous decision biases.” Loss aversion, the…
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Barry Ritholtz on the Bull Market's Birthday
…misleading picture. It ignores the collective psychology of the time—lots of investors back in March 2009 were sellers, not buyers. Indeed, that panicked selling—I surrender!—is how market bottoms get made.”…
Lessons From a Quantitative Investing Conference
…2 – The Evidence That Factor Investing Works is Overwhelming, and Our Behavior is Part of the Reason. The fact that everyone at a factor investing conference thinks that factor…
Research Affiliates on the Dangers of Using Past Returns to Predict the Future
…the journey.” Past returns versus expected future returns: “Investor behavior,” the article says, “indicates a profound belief that past is prologue,” but such biases can be “unhelpful or even dangerous.”…
Why Artificial Intelligence Won’t Fundamentally Change Investing
…AI in the following way. 1: a branch of computer science dealing with the simulation of intelligent behavior in computers 2: the capability of a machine to imitate intelligent human…
Why Both Sides of the Active vs. Passive Debate Are Right
…are the returns investors in the funds actually achieve. They include the effects of investor behavior, unlike standard returns. When it comes to investor returns, index funds face one major…
Ray Dalio: Recent Market Dips Are Minor Corrections
The head of Bridgewater Associates, the world’s largest hedge fund, says that “the latest sell-off in stocks and bonds is evidence of typical market behavior in the later parts of…
Robert Shiller on the Pricey U.S. Market
…Instead, he argues, it may be due in part to the higher rate of share repurchases in the U.S. or a “stronger psychology of fear about the replacement of jobs…
Four Top Fund Managers Advise Caution in 2018
…geopolitical issues; Elevated asset prices; Pro-risk investor behavior. Bill Gross, fund manager with Janus Capital (manages $190 billion) believes that prior market peaks allowed fund managers to partially protect their…
You Can’t Time The Market – But Many People Should
…buy and sell at the wrong times. So the difference in returns above would very likely be much greater when investor behavior is factored in, and the reduced volatility and…