Behavioral Finance | free Finance course
Every day, we make many decisions. Do I wait for the approaching truck to pass before crossing the street? Should I have a salad or fries for lunch? What percentage should I leave the cab driver? We often choose these actions practically automatically, utilising what psychologists refer to as "heuristics"—guidelines that help us get around in life. Without these mental heuristics, the plethora of daily options would paralyse us. But in other situations, these short cuts result in mistakes that may be avoided if we know what to look out for. For instance, did you know that we have a tendency to keep onto assets that are doing poorly while selling those that are performing well for us?
Behavioral Finance | free Finance course |
Or that we frequently buy insurance that we don't really need, choosing subpar insurance payment plans? And why, despite the employer's promise to match our payments, do so many of us fail to sign up for the corporate retirement plans offered by our employers?
These and much other financial decision-making errors may be avoided if we are aware of the biases that lead to them, and behavioural finance is the study of these biases. In this session, we look at these foreseeable mistakes and see where we are most prone to make them. The goal of this course is to help participants make wiser financial decisions. Learn how to make better future decisions around your spending, saving, and investing.
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