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People invest their money illogically – but trying to help them can make things worse
| Content Provider | Semantic Scholar |
|---|---|
| Author | Newall, Philip W. S. |
| Copyright Year | 2016 |
| Abstract | People invest their money illogically – but trying to help them can make things worse In a world where financial experts are frequently proven badly wrong, it is hardly surprising that many people take charge of saving for their retirements themselves. The realities of the financial world don't make this easy, though. And neither does the peculiar psychology of investing – as research in which I have been involved helps to show. One common way of saving for the future is investment funds, in which finance professionals pool together the savings of a large number of people and invest them in things like the stock market, bonds and foreign exchange. According to financial theory, the best strategy for choosing a fund is to pick the one with the lowest investment fees and stick with it for as long as possible. This follows from the efficientmarkets hypothesis, which says that financial markets are full of skilled professionals who try to make as much money as possible, so no easy opportunities to make aboveaverage profits remain in the market for long. Yet in practice, many investors choose funds that have performed well in the past, and chop and change between them – incurring new investment fees each time. The fund industry actively encourages such behaviour by prominently advertising its most successful funds. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://dspace.stir.ac.uk/bitstream/1893/25114/1/Newall-Conversation-2016.pdf |
| Alternate Webpage(s) | https://dspace.stir.ac.uk/bitstream/1893/25114/1/Newall-Conversation-2016.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
