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February 10th
A new paper in the Journal of Portfolio Management (non-gated copy available here). Abstract: Compounding can make things appear to be larger than they really are. This confusion can arise when the return from an event is compounded over a … Continu...
February 10th
I believe unexpected utility* is one of the most under-researched ideas in behavioral finance and economics. I, for one, experience it occasionally, and it is the best kind of utility. What, exactly is “unexpected utility”? It’s an exper...
February 9th
Once we have picked an asset allocation model, how often, or why should we rebalance? Continue reading →
February 6th
A problem I occasionally encounter when trying to improve behaviour in the real world is the fairness of control groups. Imagine you have a potential cure for a problem, but you have no proof that it actually works. A standard … Continue reading ...
February 4th
I’m occasionally participating in an on-going forecasting competition (Forecast World Events), and the financial forecasts in particular are interesting. Today I received a request for a forecast relating to the S&P500: What will be the largest single...
January 31st
An article in the most recent JDM makes two valuable points – sometimes winning is losing, and we’re ok with that. Some individuals are more likely to over-bid, purchasing a lottery for more than it’s best possible value. Why might … Continue readin...
January 29th
The second half of last year was not kind to my waistline. Between getting married and leaving the UK there were many causes for dinners and drinks out, which always seem to be less healthy than those at home. So … Continue reading →
December 24th
I was very happy to open up my NYTimes this morning, and actually find my own name in Paul Sullivans Wealth Matters column, discussing things to consider as we head into a 2012 with many apparent headwinds. The conversation continues on … Continue r...
December 20th
I’ve wondered about the following question a number of times: How might the fact that we operate in base-10 (0,10,20…100…200) influence our decisions? We all know that we occasionally make decisions based on simply rounding up or down. B...
December 16th
Robert Frank’s report on what female millionaires want from financial advisors was interesting. It reports on a survey of 550 women millionaires, and sounds like it was particularly geared towards asking questions we’d stereotypically expect women to answ...