Behavioural Finance - why it's so relevant to investing...
Tom Stevenson, Investment Director I was delighted that Richard Thaler was awarded the Nobel Prize for Economics last week. Thanks to the work of Thaler and other giants in the field of behavioural economics like Daniel Kahneman and Amos Tversky, it is increasingly accepted that ‘homo economicus’, the rational agent always seeking economic advantage, does not exist. Instead, it is now understood that when we make economic, financial and investment decisions, we do so as flawed humans with an inbuilt tendency to do the wrong thing. Recognising this is the first step towards changing our behaviour for the better...