Rebalancing to stay on track
If you adhere to basic investment advice that every experienced or even novice investor doles out, you would know that it is prudent no to put all your eggs in one basket. Eggs here refer to your investment and the basket is the financial instrument. The diversification of assets across varied instruments is referred to […]
Latest words of wisdom by the Oracle of Omaha – Warren Buffett
Even the Oracle of Omaha has seen a few firsts with this Pandemic at bay. For starters, it was the first time Buffett went virtual to report the recent financial performance of Berkshire Hathaway, which typically is a week-long extravaganza- a treat in itself. He confessed never to have presented with the assistance of PowerPoint […]
Active vs Passive Investment
Savings and investments are a must for everyone. As inflation leads to price rise of essential commodities, your balance should also be in line with the increased expenses to maintain headroom for making financial provisions. Therefore, savings are not enough and investments have become necessary. With investing you have the option to either be an […]
Insurance OR Investment NOT Insurance AND Investment
Life, Home, auto, fire are most common forms of insurance that all of us would have heard of. But did you know about these 4 strange instances in which insurance has been used to protect ones assets? 1. Footballer Cristiano Ronaldo has insured his legs for 90 million pounds! 2. ‘Death by coconut falling on […]
Investing in the Stock Market- 3 things you must avoid doing.
Over the course of time we have written several behavioral finance articles to share our knowledge with investors looking to create long term wealth. One can apply our Thinking Man advice from those articles with respect to the recent BSE Sensex crash. The sharp decline in the stock market has made everyone very tensed so […]
Anchoring
Anchoring is a concept in behavioral finance where a person’s decision making ability is anchored in some past event. For example an investor today stays shy of investing because his mind is anchored in the 2008 stock market crash. He cannot think beyond. Thinking Man suggests that in investments our decisions should be always future […]
Naive Diversification
“Naïve” means “inexperienced” in particular tasks assigned, even while taking important decisions of investments. There are instances in pasts wherein, investors use ‘naïve’ rules of thumb for portfolio construction due to lack of better information. One such rule is known as the ‘1/n’ approach, where investors allocate equally to the range of available asset classes […]
Just Because Syndrome
Do you plan your weekend trip in advance or just pack your bag and go on an unplanned trip?? An unplanned trip sounds risky right!! Then why doesn’t unplanned finance sound risky? Why does planning your financial future always take a back seat?? Our personal finance decisions affect our life on a daily basis. Future financial […]
Behaviour Biases
At its core, behavioral finance attempts to understand biases in human behavior when it comes to personal finance. It combines social and psychological theory with financial theory as a means of understanding how price movements in the securities markets arises independent of any corporate actions (changes in the intrinsic value of the stock). One of […]