Have you ever struggled with a financial decision? If you're like most people, I suspect that the math wasn't the hard part. What makes financial decisions a challenge, more often than not, is the subjective element. Financial decisions involve lots of variables—your future income, interest rates, [...]
How to make financial decisions
Suppose you wanted to guess the winner of this Sunday's Super Bowl. Which of these methods do you think would work best? (a) Flip a coin (b) Make an educated guess (c) Gather data and conduct an informed analysis In a classic study, researchers Paul Slovic and Bernard Corrigan attempted [...]
Alphabeticity bias
In the world of personal finance, researchers have long understood that behavioral biases negatively impact investors. Examples include recency bias, hindsight bias, confirmation bias, and many others. These are all well documented. But recently, a group of researchers uncovered yet another investor [...]
The power of atomic habits
James Clear, in his bestselling book Atomic Habits, provides a thought-provoking illustration: Suppose a plane takes off from Los Angeles on its way to New York. But, after taking off, the pilot turns the nose of the plane by an almost imperceptible 89 inches. Where will the plane end up? The [...]
The power of intuition
Robert Soros, son of billionaire hedge fund manager George Soros, has a surprising explanation for his father's success: “You know the reason he changes his position on the market or whatever,” Robert says, “is because his back starts killing him.” You read that right: The junior Soros attributes [...]
