By Herman Brodie
TCAM blog

Are Seasoned Investors Better?

At least one asset is guaranteed to enrich your portfolio this year: your investing experience. Stick at it long enough and you will encounter practically everything from start-ups to meltdowns, flashes in the pan to flash crashes, slim pickings to fat fingers. You will also discover the financial impact of earthquakes and tsunamis, of both the political and geological varieties. The wisdom of the years, one might argue, ought to make you a better investor.

Empirical evidence, reassuringly, supports this hypothesis, with one important caveat...More...

By Elizabeth Olson
The New York Times
Nov. 11, 2017

I Won the Lottery and I Need Help. No, Really!

Winning the lottery can be a bolt of amazing luck. But whether the luck lasts depends on whether lottery winners fritter away their unexpected largess or manage to achieve financial security.

When Alcario and Carmen Castellano won $141 million in California more than a decade ago, they were fortunate enough to have a financial professional in the family to advise them. More..

by Jean Chatzky
NBC News
Dec.28.2017

3 common behaviors that stifle our retirement savings

Would you rather have one marshmallow now — or two marshmallows later? It’s an iconic scenario made famous by psychologist Walter Mischel, the administrator of the 1960s “marshmallow test” measuring self-control and instant gratification. Most people go for the here and now. Swap out marshmallows with money, and you’ve got an all-too-common problem... More...

By Michelle Singletary November 10, 2017
The Washington Post

Your spending problem is all in your head — here’s why

A number of websites and mobile apps can turn you into a budgeting wizard, doing everything from downloading your banking information and allowing you to create impressive charts to alerting you when you’ve blown past your self-imposed spending limits. But after years of working one-on-one with financially challenged people, here’s what I’ve found: The source of their money troubles isn’t their lack of a cool budgeting app. And most of the time, it has nothing to do with their lack of funds. More...

By Yuval Harari
April 18, 2017
The New York Times
 

People Have Limited Knowledge. What’s the Remedy? Nobody Knows

[THE KNOWLEDGE ILLUSION
Why We Never Think Alone
By Steven Sloman and Philip Fernbach, Riverhead Books]

In “The Knowledge Illusion,” the cognitive scientists Steven Sloman and Philip Fernbach hammer another nail into the coffin of the rational individual. More...

By Christopher Robbins
October 18, 2017

Clients Say Advisors Sometimes Undermine Their Trust In Them

While most investors trust their financial advisors, many say they’ve had an experience undermining that trust.

Trust is the axis upon which an advisor-client relationship revolves, and according to “Trust and Financial Advice,” a paper from Vanguard’s Center for Investment Research, most advisors seem to be doing a good job establishing and maintaining their clients’ trust. More...

By Ben Hawkes, Business Psychologist
October 18, 2017

Entrepreneur or Narcissist?

What’s the difference between an entrepreneur and a narcissist?
It may be harder to tell than you think. In a 2016 study, researchers sent a survey to 466 business and MBA students asking them questions about their intentions to become an entrepreneur and their motives for entering entrepreneurial ventures. They also measured their standing on the "dark triad" traits - narcissism, psychopathy, and Machiavellianism - which are associated with antisocial and counterproductive behaviors. More...

By Ben Steverman
Private Wealth Magazine
October 20, 2017

'Psychopath' Hedge Fund Managers Make Less Money Than Nice Guys

In the world of high finance, it’s been an article of faith among some that the only way to succeed—or even survive—is to be ruthless. But a new study in the latest issue of the Personality & Social Psychology Bulletin suggests those money makers at the top of the food chain, hedge fund managers, could benefit from being a little less mean. More...

By
Sean Allocca
Financial Planning
October 25 2017

Can ‘financial therapy’ cure bad client behavior?

Advisors specialize in knowing every facet of their clients’ financial lives. Will they need to delve into their mental processes and emotional states as well?

Absolutely says Dan Egan, Betterment’s director of behavioral finance. With automated software digitizing many menial tasks — like rebalancing portfolios and utilizing tax-loss harvesting — the advisors’ value will hinge on dealing with complex human relationships, he says. More...

By Barry Ritholtz
Bloomberg View
October 20, 2017

Stick With Numbers When Judging Trump's Rally -- Anything else is just story-telling in the interest of scoring political points.

Whenever I write about anything with even a vague political component, I always get the strangest correspondence. Much of it is unpublishable and sometimes amusing, and usually worthy of nothing more than a Twitter block. And yet these missives offer something useful about one of my favorite subjects: Why our brains are not wired for finance. More...