Looking at the central role emotion and uncertainty play in financial decision-making and behaviour for finance professionals and the wider public
"You don't get rich by what you earn. You get rich by what you don't spend." (Henry Ford) Why are some people wealthier and better off than others? Given similar income levels, what predicts who will build greater wealth? Why are people of the same age and similar background factors so different in their wealth… Continue reading Can your habits and attitudes make you wealthy?
I am delighted to introduce a guest blog by Dr Daniel Richards about some research we collaborated on. The disposition effect describes a bias that causes investors to be more willing to sell investments that have risen in in value than those that have fallen in value. Our research shows that investors who rely less on emotions and intuition and investors who manage their emotions more effectively are less likely to show this investment bias.
Myself and Jacqui Gabb discuss the importance of money and emotions in relationships.
In the video in this blog I discuss with the MoneyMail's Rachel Rickard Straus the psychology of advertising, impulsive spending and self control.
“There have been great societies that did not use the wheel, but there have been no societies that did not tell stories.” —Ursula K. LeGuin To listen to some scholars of decision-making, it is a great wonder that humans have survived as long as they have. We are constantly prone to biases, rely on simplistic… Continue reading Different Minds: why we need human capabilities and machine intelligence*
Successful fraud requires both a set of skills and a willingness to deliberately target and deceive others. The most successful fraudsters have a capacity to look us in the eye, to engage our trust and then betray it without a qualm. This capacity is actually quite rare and often associated with personality disorder (or perhaps… Continue reading Scams, Victims, and Scammers
"Money doesn't talk it swears" Bob Dylan Differences in attitudes to money are a major cause of disagreements in relationships. Research shows that financial disagreements are one of the more frequent and less easily resolved causes of relationship conflict. One study found that whilst people are often attracted to potential partners with different emotional reactions to spending, that… Continue reading Money and relationships
Let’s call him James, a trader in a City investment bank; young, smartly dressed, confident, and a little impatient. He sat across from me in the interview: “It’s really important to stay cool. For myself, I can say that I really don’t have much emotion while I trade”. Half an hour later, as he relaxed… Continue reading ‘The heart has its reasons’: emotions and cognition in the world of finance
Here is a link to my interview with Michael Considine of Share Radio. Where I talk about my research on emotions and investment and the work of the True Potential Centre for the Public Understanding of Finance.
Hermit crabs rely on acquiring discarded shells for their protection and are constantly on the look-out for better shells. However, faced with environmental stress they prefer to stick with their old shell, however unsuitable, than risk moving to a new one[i]. Experiments with rats show that under stress habitual behaviour persists longer in the face… Continue reading On fund-managers, rats and hermit crabs: reversion to familiar habits under stress
The Open University's centre for the Public UnderStanding of Finance (PUFin) launches new MOOC Lead educator: Martin Upton, Director of the True Potential Centre for the Public Understanding of Finance (PUFin) at the Open University Business School, and former Treasurer of Nationwide Business Society Gain the skills to manage your personal finances: managing budgets, debts,… Continue reading New Personal Finance MOOC
The video below is a presentation I made at the launch of the Open University Business School's Centre for the Public Understanding of Finance (PuFin). You can find a copy of the slides here. Martin Lewis also made a very engaging presentation about financial education at the same event. Further presentations from the event can… Continue reading The Emotional Business of Finance
Emotional Finance 