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The Seven-Day News Diet

The financial media recently has been consumed by the issue of ultra-fast computer-driven trading and what it might mean for ordinary investors. But arguably what does the most harm to people are their own responses to high frequency news. The growth of 24/7 business news channels and, more recently, financial blogs, Twitter feeds and a […]

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Old Stories; True Stories

Everyone loves market premiums. But not everyone can withstand the risks. There are two possible responses – try to time the premiums or ride out the risk for the return on the other side. Which works better? Let’s look at history. When markets are stormy, it’s natural to want to pull your portfolio into a […]

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Connecting the Dots

Human beings love stories. But this innate tendency can lead us to imagine connections between events where none really exist. For financial journalists, this is a virtual job requirement. For investors, it can be a disaster. “Needing to create order from chaos, journalists often stick the word “after” between two events to imply causation. In […]

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Seven Ways to Fool Yourself

The philosopher Ludwig Wittgenstein once said that nothing is as difficult for people as not deceiving themselves. But while most self-delusions are relatively costless, those relating to investment can come with a hefty price tag. We delude ourselves for a number of reasons, but one of the principal causes is a need to protect our own […]

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