Behavioural Finance Archives - Investment Innovation Institute

Insights articles categorised 'Behavioural Finance'

The Illusion of Rationality

In Search of Temperament IV – Self-Awareness and Self-Control

This is the fourth part in a series on the ideal investor temperament. So far, we’ve examined curiosity and flexibility, contrarianism and patience. In this post, we’ll consider Self-Awareness and Self Control. Jim Paul’s life story and the lessons that he learned will be our guide. I recently finished reading What I Learned Losing a […]

In Search of Temperament III – Patience

Behavioural Finance, MarketFox

Patience is a critical attribute of successful investors, but facing pressure from clients or colleagues is not always easy.

In Search of Temperament II – Contrarianism

Behavioural Finance, MarketFox

In this second instalment of the series on investor sentiment, MarketFox columnist Daniel Grioli delves deep into the mindset of contrarian investors.

We are all Actors in the Play of Economics

Behavioural Finance, Economics

The way we think and speak about investments shapes the industry we operate in, Tony Day says. The realisation that we are all actors in the play of economics should make us more aware of the importance of culture in setting an investment strategy.

What Trait Psychology Tells Us about Factor Investing – Part II

Behavioural Finance, MarketFox

Do factors have explanatory power in investment returns or are they merely descriptive? This is an important difference because the first characteristic would give them predictive powers, while the second would merely reflect past performance. In this second part on trait psychology, MarketFox columnist Daniel Grioli looks for clues in criticism of this branch of psychology.

Heuristics are Biased. But are They Lazy and Dumb?

Behavioural Finance, MarketFox

In this second instalment of the four part series on the criticisms of behavioural economics, MarketFox columnist Daniel Grioli looks at heuristics: are they lazy and dumb?

Are We Biased? – Bringing Time Series into Behavioural Finance

Behavioural Finance, MarketFox

Before becoming a professional investor, I was a psychology student at the University of Melbourne. The course took me on an interesting personal journey. In first year, we studied the classic research. Studies such as Pavlov’s conditioning experiments with dogs, Asch’s conformity studies, Milgram’s coerced compliance experiments and Zimbardo’s infamous Stanford prison experiment. By the […]

Investing Alongside Machines

Behavioural Finance

In his new book ‘Cyborg’, Simon Russell explores how investment teams and artificial intelligence could come together. And it is not as scary as you might think it is.

Quants Part I – Are Quants the Chiropractors of Finance?

Behavioural Finance, Factors, Quant & Systematic, MarketFox

The danger of relying too much on quantitative models is the implicit belief that unless something can be measured and identified as a factor it doesn’t really exist, Daniel Grioli writes.