Understanding Behavioral Finance with Lisa Kramer: From Seasonal Affective Disorder to Overconfidence
In this episode of Barenaked Money, host Colin White from Verecan Capital Management interview Lisa Kramer, the inaugural Verecan Chair in Behavioural Finance at the University of Toronto. They discuss the importance of behavioural finance, which integrates psychology into economic and financial contexts to understand decision-making processes. Key topics include the impact of sunlight on financial risk preferences, the differences between behavioural economics and behavioural finance, and practical advice for mitigating the effects of seasonal mood changes on investment decisions. Lisa also shares her research on the broader implications of overconfidence in trading. The episode emphasizes the need for awareness and informed decision-making in personal finance.
00:00 Introduction to Barenaked Money
00:16 Special Guest: Lisa Kramer
00:50 Behavioural Finance and Its Importance
02:49 Behavioural Finance vs. Behavioural Economics
05:35 Seasonal Effects on Financial Decisions
10:42 Strategies to Mitigate Behavioural Biases
21:47 Financial Decision Making
32:42 Conclusion and Final Thoughts
