Good article by Gregg Fisher CFA on Inside Investing on the power of rebalancing portfolios. Simple rules can control behavioural biases; addresses overconfidence and the endowment effect. http://cfa.is/US419e
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Tag Archives: Endowment Effect
Endowment Effect and AIM stocks
July 7, 2012 
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Funds full of AIM stocks have at times delighted investors. Their time in the sun is usually when credit eases and the economy picks up. From the lows of 2003, the AIM Index more than doubled in just three years. And, after the end of the last bear market in March 2009, the sector repeated […]
Continue readingGetting attached to stocks – the Endowment Effect
March 11, 2011 0 Comments
Changes in stockmarket direction are hard to deal with. Assessment of new information is just part of the problem. Imperfect mental accounting means assessment of risk is slow to change. Investors realise they should be adjusting their portfolios, but psychology gets in the way. Some defensive sectors, like telecoms, look attractive now, but what should […]
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Behavioural Edge 