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Longevity Planning
This minor statistical overestimation of life expectancy can be corrected by the behaviour finance. Most people do not factor in ...
. Emotional Response Control to Market Fluctuations
Volatility in markets evokes emotional responses that, in the majority of instances, assume the m...
But the other extreme makes you overconfident and invest too aggressively. What behavioural finance offers is the middle ground: you diversify your ri...
Diversification to Control Risk
Diversification of investments is just another area that the behavioural finance stream looks into. Loss aversion mak...
Realistic Retirement Goals
People overestimate how much they will have or discover they need in retirement because of optimism bias or simply because...
Thirdly, the dollar-cost averaging can also be accomplished through the use of automatic savings plans because it enables you to buy investments with ...
Removing that process of deciding when you could spend money otherwise saved into a retirement account is very effective. You save and allow yourself ...
Automatic Savings to Help Mitigate Present Bias
The most interesting takeaway from the best behavioural finance models is the way of automating one's...
For instance, knowing that he most probably experiences present bias creates a mental set that would lead to more saving for retirement and less indul...