by Guest Author
on September 21, 2009
This is a guest post from Tim, author of the Psy-Fi blog, an excellent take on psychology and finance.
Behavioural finance – the study of where psychology meets finance and a car crash ensues – is now accepted as revealing how people mismanage their investments.
The behavioural finance approach offers a very different view of the world to old-fashioned efficient market theories, which reckoned that all stock prices were correct and based on rational thinking by rational investors in a rational world.
No one who’s experienced the last decade of turmoil can really believe that markets are efficient!
On the other hand, efficient market theories have the great benefit that they can be used to create so-called quantitative models. These models work for most of the time while people behave roughly rationally, and so enable investment firms to make decent amounts of money.
Unfortunately they’re also completely useless when everything goes wrong.
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by The Investor
on September 19, 2009
My weekly commentary followed by my weekend news and blog links round-up.
A quiet week on Monevator due to my short canal break hides lots going on behind the scenes.
With the days getting shorter and the crops being harvested, it’s a good time for an update on this blog and the markets.
Quick holiday report
A few readers were kind enough to ask how my holiday went. It was fantastic! Most of my worries about dad evaporated once we were on the boat, and it was me who fell into the canal, not him!
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by The Investor
on September 18, 2009
Attention all readers! Bargain alert!
Mike Piper, the author of the excellent blog and book about passive investing, Oblivious Investing, has decided to release his latest 100-page book as a free download.
Quite why Mike is doing us writers out of a job/hobby by releasing such great material for free is another matter, but from your point of view, who cares?
UK readers might get confused with Chapter Two, which is about American tax saving plans. Just substitute Mike’s talk about Roths and 401Ks for our ISAs and pensions — the main point (sheltering from tax is good) is true here too.
Don’t delay, because Mike plans to remove the free option when the book goes on sale in Amazon next month on 1st October.
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by The Investor
on September 17, 2009
As the author of a blog about investing and getting richer, I’m keenly aware that most people who read money blogs are in debt and trying to stop themselves getting poorer.
It’s no coincidence then that the most successful personal finance blogs are about struggles to get out of the red.
Obviously that’s bad news for me, since it means far fewer potential readers of my writing.
But it’s also bad news for these debt-ridden folk.
Investing is like any other positive habit – you need to start investing early and repeat it often to see the benefit. The longer you put it off, the harder it will be to grow a nest egg to replace your salary or enable you to retire early.
With this in mind, here are a few ideas for how cash-strapped surfers who stumble upon Monevator might start investing while funds are low.
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