Expectations regarding the future are usually an extrapolation of the recent past; in behavioural finance this is known as hindsight bias, which is one of the most common mistakes made by investors and I am not only referring to Mr.
Five key tips for DIY investing
If you planning to be the next Allan Gray, then this article should be of interest to you with five tips for successful DIY investing. Tip 1: Read articles on behavioural finance and study the various biases, which wreak havoc
Facing retrenchment with champagne and oysters
Well-known scenario planner, Clem Sunter, uses an analogy of a fox and a hedgehog to describe the various role players in the economy. The hedgehog represents the corporate fat-cat versus a fox who is the entrepreneur, the mover and shaker
What you don’t want to hear from your financial adviser
As investors we hate ambiguity, we want certainty, which is why we dislike the idea of randomness. We want our advisors / managers to know exactly what is going on. Financial experts must speak confidently and explain what is driving
Negotiating uncertainty
I can quite honestly say as an investor for over 26 years now that I have never experienced a dull day, but that said, there is a Chinese curse, which says, “May he live in interesting times.” As investors we
Keep an eye on those Interest Rates
It’s a well-known fact that lower interest rates are good for the equity and property markets. The obvious drivers are: Consumers have more disposable income to spend after paying their debt, which increases business profits Cheaper debt lowers financing costs
Financial advisors also act, speak like preachers
At gym, the other day a local minister mentioned that he regularly read my article. He questioned me on the difficulty of selecting a new topic each week. His passing words were, “at least you know how we ministers feel
Keep those emotions at bay
Our love for stories and the ability to share stories widely has been mooted as the key determinant of our success as humankind, but also our potential downfall as investors. We cannot resist a good story, which talks to our
Commentators who think they know it all
My favourite to despise financial commentator, MH for anonymity reasons, was up to his old tricks this week with another article trashing SA in favour of offshore investing. He is confident and outspoken in his view, which reminds me of
Inflation bogey is only ‘transitory’
The financial world loves coming up with new buzz words to encapsulate what is trending. Alan Greenspan famously referred to “irrational exuberance” in describing the property bubble of the early 2000’s. “Green-shoots” was used extensively in the aftermath of the