Outline:
Part I – Reviewing common bad investment habits
- Case study
- Discussing the root cause behind
- Cognitive Biases – Overconfidence, Confirmation, Anchoring, Mental Accounting, etc.
- Emotional Biases – Loss Aversion, Regret-Aversion, Endowment, etc.
Part II – Remedial actions
- Understanding your own investor types
- Asset allocation: the evergreen remedy
- Making wise strategic and tactical asset allocation decisions
- Preparing your own MI (Management information)
“- Bypassing” the biases in decision making by adopting some simple but effective mechanisms
- Other remedies (e.g. self-talk)
Part III – Other traps in marking investment decision
- Hyperbolic discounting: the gravitational force hindering us taking the first the first step
- Performance measures: what you see is what you get?
- Model risk: can we trust the well-known financial models