Have any lessons been learned following the Great Financial Crisis? Around the world, it looks like new bubbles are growing. Certainly, the crisis showed that central banks and politicians can move decisively on the threat of economic collapse. But the sequel has been years of bad policy; propping up banks, bad loans and unsustainable growth. […]
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Tag Archives: Crowd behaviour
3 key psychological challenges for investors
November 13, 2015 
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What are the main challenges to achieving good long term returns? Investors focus mainly on what the stockmarket might do; less so on their own behaviour. Some of the human behaviour that confers advantage in everyday life can drive poor investment decisions. The big challenges include; how we search for patterns and trends, the desire […]
Continue reading Should we worry about China?
May 29, 2015 0 Comments
Investors struggle with bubbles. Sure, we know they eventually burst, but lessons are quickly forgotten. Now China is a puzzle: it might look like a bubble, but what to do? Uncontrolled Yen devaluation could break China’s Renminbi peg and trigger more global deflation. But, timing and is hard to assess. Analysts and the press pay […]
Continue readingBehavioural Finance Jan 2013
February 21, 2013 1 Comment
“Behavioural Finance & Investment” MSc in Investment Management, Heriot-Watt University 22 January 2013 Presentation by Professor Colin McLean I am going to focus on some practical ways in which behavioural finance can be applied day-to-day, and draw some conclusions about what we can do about psychology. I am not going to tell you to try […]
Continue readingMagical Thinking and Emotional Biases
May 17, 2012 0 Comments
Despite the widespread mistrust of politics, great faith continues to be placed in our leaders. Investors are again focusing on a series of votes in Europe, dissecting daily opinion polls and every utterance from politicians. The hope is that democracy will provide the solution to decades of bad economic management – all that is needed, […]
Continue readingStockmarket volatility and the gamblers fallacy
May 13, 2010 0 Comments
Sharp market sell-offs look like the ultimate irrational investor behaviour. It is hard to understand why share prices of banks and other big companies should drop more than 10% in days, despite little change in the economic background. May’s volatile stockmarket seems bizarre, contradicting any concept of market efficiency. But it provides a real opportunity […]
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Behavioural Edge 
Risks are growing in big equity and bond funds
Money printing and the current stockmarket boom are increasing systemic risk, pushing problems into new areas. Now the questions is; are some asset managers too big to fail? The financial crisis highlighted risks in banks and insurance, but other areas have been overlooked. Finally, regulators are beginning to recognise risks in the investment sector, and […]
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