Four fun Behavioral Finance videos you should watch

availability-bias-2

What do most investors have in common with football? Would you have swooned for “tulip mania” in the 17th century? Is Loss Aversion Really just about Dodging Water Hazards? Why investors rather put money in the bank earning low yields, while the real threat of inflation is taking bite of their purchasing power? We like to think we invest rationally, but the field of behavioral finance has shown that there are social, emotional, and even cognitive factors that can affect our investing … [Read more...]

3 financial lessons to learn from iPhone 6 flipping story

now-later

In today's Straits Times article "Early birds get juiciest profits flipping iPhone 6", it was reported that "in just 30 minutes, finance manager Sky Hui made a cool profit of $4,000 from buying and re-selling three new iPhones." Interestingly, in this simple story, there are three essential lessons that you can learn to achiever greater financial success. Lesson #1: Successful investing is anticipating the anticipations of others How did Mr Hui do it? It was reported that he had pre-booked … [Read more...]

Five reasons why you must define your investment goals

alice-cheshire-cat

We are all familiar with Lewis Carroll's story "Alice in wonderland". One day Alice came to a fork in the road and saw a Cheshire cat in a tree. "Which road do I take?" She asked "Where do you want to go?" responded the Cheshire Cat. "I don't know," Alice answered. "Then," said the cat, "it doesn't matter." Have you ever drifted through life aimlessly, wondering why your life lacks purpose and significance? That is because you did not bother to write down your goals. It is the same when it … [Read more...]

You Could Be Richer Than You Think

you-could-be-richer

Every year, more than $16 billion in dividends are paid out to investors. It was reported this week that there were $68.3 million worth of unclaimed shares and dividends still held in SGX, these belong to 83,000 investors. Among them, some 74,000 investors failed to cash their dividend cheques, amounting to $53.7 million in total. "In particular, one surprisingly forgetful person stands to be $1.2 million richer if he collects all his outstanding dividends." While the news may surprise many … [Read more...]

One Night Stand Investment

one-night-stand

I stumbled upon this interesting term  "One Night Stand Investment" from Investopedia.com today, it means "Buying a security with the intention of holding it for the long term, but subsequently panicking and selling it the following day." Investopedia further explains that "An investor sells out the following day typically because of bad news or a sudden change in long-term expectations". From my experience, the reality is just the opposite. Many investors buy a security with the intention of … [Read more...]