Since the earliest days of trading goods, humans have looked for ways to decrease risk by sharing a cut of the profits. For example, it wasn’t seen as wise to invest all your capital in a single ship. If it sank, you’d lose everything. So, you’d invest in several ships, hoping that at least a [...]
It’s pretty obvious that birds have much smaller brains than humans. In fact, calling someone a birdbrain is considered an insult. Yet, research has shown that even though birds lack the analytical abilities of humans, they are superior to people in certain kinds of decision making. The evidence is in how our two species perform [...]
If a friend describes the latest spy novel as “about as interesting as watching paint dry,” or a review says the plot of an award-winning film “is like watching grass grow”—you take that information as a warning. The book and the movie are boring. And the last thing you want when you’re looking for entertainment [...]
In 1995 plush toy maker Ty Warner had a problem. His Chinese supplier could no longer make his top-selling stuffed animal, a lamb named Lovie. Warner was worried that when customers found out they could no longer buy this popular item, they would be upset. He came up with a solution that would make him [...]
Everyone can agree that financial literacy is a good thing. When people understand the basics of personal money management, saving, and long-term investing, they’re better equipped to make informed decisions about their finances. But financial literacy alone can only take you so far. Simply having knowledge on a subject is often not enough to overcome [...]
It’s not controversial to say that investing biases can hurt the performance of your portfolio. Most investors would agree. And yet by its very nature a bias—an unreasoned opinion—will often be invisible to the person holding it. You can find evidence of this in a recent DALBAR, Inc. study of investor behavior. Researchers found that [...]
The Biggest Loser, which ran on NBC from 2004 to 2016, was a reality-TV hit for a number of reasons. It dealt with a concern of many Americans (losing weight). It revealed the personal struggles of the contestants who were often overcoming lifelong challenges with food. And it delivered the results everyone wanted to see. [...]
Nearly 20 years ago the Fox network began airing a TV show called American Idol. Thousands of unknown singers showed up to audition. And after multiple rounds of competition, the cream rose to the top and we saw that there really was great talent just waiting to be discovered. (Kelly Clarkson won that first season.) But [...]
Whether we're ready for it or not, 2022 will be here in a few days. Another year will have passed. You'll look at your schedule, your finances, maybe even at the bathroom scale and wonder if this time next year you'll be any closer to achieving the changes in your life you'd really like to [...]
The words “speculating” and “investing” often get used interchangeably. And that’s not surprising, since they describe somewhat similar concepts. In both cases, you are laying out money with the hope of gaining a return in the future. And to muddy the waters further, marketers are prone to use the words to either cast aspersions on [...]