Dr Daniel Crosby, author and Chief Behavioral Officer at Brinker Capital in the USA talks about psychology and why it can sometimes be a major impediment to successful investing.
He describes how the rules for investing, similar to the rules for maintaining a healthy body weight, are very simple to understand but hard to stick to. Daniel highlights a few rules from his book The Laws of Wealth and reminds us how powerful our emotions are and how they drive our decision making much more strongly than data do.
We discuss research that shows that forgetfulness makes exceptional investors. One of the most important things you can do when it comes to investing is to do nothing. This is hard to do since most of us have an action bias.
We end with some tips on making good financial decisions, the three E’s. As Nick Murray said, “Wealth isn't primarily determined by investment performance, but by investor behavior.”
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