Robert Shiller won the Nobel Prize in economics last year for his research on spotting market bubbles. He’s also a pioneer of behavioral finance, developing brilliant explanations for how psychology causes us to do dumb things with our money.
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Investors have a hard time accepting that they are in a “very-low-return world for a long time,” Charles de Vaulx of International Value Advisers told Advisor Perspectives. “Some individuals do not want to amend their lifestyle (i.e., save more and consume less) and may not want to be told that at best, the return on their financial assets may be 3 to 5% in the next 10 years, and even less once you adjust for inflation.” He also said its important for advisors to remind clients that they cannot “just equate high economic growth to good stock market performance, particularly with respect to emerging markets.”
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As human beings, our brains are booby-trapped with psychological barriers that stand between making smart financial decisions and making dumb ones.
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Think of the successful Wall Street investor, and you are likely to envision a hard-charging, aggressive, Type-A personality – someone who can carry on multiple conversations, keep an eye on four computer screens, yell over the trading din and watch CNBC all at the same time.
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Looking for a perfect home can be an emotional roller-coaster, but a new study suggests finding the right property often comes down to love at first sight.
In its report titled Psychology of House Hunting, the Bank of Montreal found that 80 per cent of prospective homebuyers know if a house is the right one for them the moment they step inside.
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Want to know the secrets to setting a “lucky” asking price for your home? Trulia‘s Chief Economist reveals how marketing psychology, tradition, and superstition can sneak into home prices.
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