These Five Cognitive Biases Hurt Investors the Most

There is no shortage of cognitive biases out there that can trip up our brains.

By the last count, there are 188 types of these fallible mental shortcuts in existence, and they constantly impede our ability to make the best decisions about our careers, our relationships, and for building wealth over time.

Biases That Plague Investors

In today’s infographic from StocksToTrade, we dive deeper into five of these cognitive biases – specifically the ones that really seem to throw investors and traders for a loop.

Next time you are about to make a major investing decision, make sure you double-check this list!

The Five Cognitive Biases That Hurt Investors the Most

The moves that may seem instinctual for the average investor may actually be pre-loaded with cognitive biases.

These problems can even plague the most prominent investors in the world – just look at JPMorgan’s Jamie Dimon!

Biases to Avoid

Here are descriptions and examples of the five cognitive biases that can impact investors the most:

Anchoring Bias
The first piece of information you see or hear often ends up being an “anchor” for others that follow.

As an example, if you heard that a new stock was trading at $5.00 – that is the piece of information you may reference whenever thinking about that stock in the future. To avoid this mental mistake: analyze historical data, but don’t hold historical conclusions.

Recency Bias
Recency bias is a tendency to overvalue the latest information available.

If you heard that a CEO is resigning from a company you own shares of, your impulse may be to overvalue this recent news and sell the stock. However, you should be careful, and instead focus on long-term trends and experience to come up with a more measured course of action.

Loss Aversion Bias
No one wants to lose money, but small losses happen all the time even for the best investors – especially on paper.

Loss aversion bias is a tendency to feel the effects of these losses more than wins of equal magnitude, and it can often result in a sub-optimal shift in investing strategy. Investors that are focused only on avoiding losses will miss out on big opportunities for gains.

Confirmation Bias
Taking in information only that confirms your beliefs can be disastrous. It’s tempting, because it is satisfying to see your previous conviction in a positive light – however, it also makes it possible to miss important findings that may help to change your conviction.

Bandwagon Bias
No one wants to get left out, but being the last one to pile onto an opportunity can also be cataclysmic. If you’re going to be a bandwagon jumper, make sure you’re doing it for the right reasons.

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Cast Your Own Stamps to Put Harriet Tubman on the $20 Bill

Put a new face on your money with these custom stamps. Don’t worry, it’s not illegal so long as you don’t make the money unusable.

Read more on MAKE

The post Cast Your Own Stamps to Put Harriet Tubman on the $20 Bill appeared first on Make: DIY Projects and Ideas for Makers.

Chart: The Trillion Dollar Club of Asset Managers

Chart: The Trillion Dollar Club of Asset Managers

Chart: The Trillion Dollar Club

$1T+ club is dominated by U.S. based asset managers

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

In the late 1700s, it was the start of the battle of stock exchanges: in 1773, the London Stock Exchange was formed, and the New York Stock Exchange was formed just 19 years later.

And while London was a preferred destination for international finance at the time, England also had laws that restricted the formation of new joint-stock companies. The law was repealed in 1825, but by then it was already too late.

In the U.S., exchanges in New York City and Philadelphia took full advantage by dealing in stocks early on. Eventually, for this and a variety of other reasons, the NYSE emerged as the most dominant exchange in the world – helping propel New York and Wall Street to the center of finance.

The Center of Finance

Wall Street, and the U.S. in general, is now synonymous with finance – and most of the world’s largest banks, funds, and investors maintain a presence nearby. The biggest asset management companies, which pool investments into securities such as stocks and bonds on behalf of investors, are no exception to this.

Today’s chart shows all global companies with over $1 trillion in assets under management (AUM).

Not surprisingly, all but 17.1% of assets managed by this $1 Trillion Club are overseen by companies based in the United States.

Rank Company Country AUM
#1 BlackRock Inc. USA $5.7 trillion
#2 Vanguard Group USA $4.4 trillion
#3 State Street Global Advisors USA $2.6 trillion
#4 Fidelity Investments USA $2.3 trillion
#5 J.P. Morgan Asset Management USA $1.9 trillion
#6 BNY Mellon USA $1.8 trillion
#7 Pimco USA $1.6 trillion
#8 Amundi France $1.6 trillion
#9 Capital Group USA $1.4+ trillion
#10 Legal & General Investment Management UK $1.3 trillion
#11 Government Pension Investment Fund Japan $1.2 trillion
#12 PGIM USA $1.0+ trillion
#13 Northern Trust USA $1.0 trillion
#14 Wellington Management USA $1.0 trillion
#15 Norges Bank Investment Management Norway $1.0 trillion

Even further, outside of Northern Trust (Chicago), Pimco (Newport Beach), and Capital Group (Los Angeles), the remaining U.S. companies are based in the Northeast specifically – either on Wall Street, or just a short drive away.

The Newest Entrant

The newest entrant to the $1 trillion club is Norway’s sovereign wealth fund, which is managed by Norges Bank Investment Management. It’s the world’s largest sovereign wealth fund, and it was “never forecast” to get so big.

The Norwegian fund recently joined France’s Amundi ($1.6 trillion), the UK’s Legal & General ($1.3 trillion), and Japan’s Goverment Pension Investment Fund ($1.2 trillion) as non-U.S. members of this exclusive club.

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The segments healthtech and biotech investors are putting their dollars towards

Startups in the wide-ranging Australian healthtech sector have raised more than a combined $165 million in funding.

Rather unsurprisingly, leading investments in the space feature a lineup of startups working with treatment solutions, who together make up nearly a quarter of all healthtech startups based locally.

Treatment startups have raised a total of $82.6 million, led by the Sydney-based GenesisCare. A provider of heart, sleep, and cancer treatment technology, the business has raised nearly $38 million to date in a single round led by Advent Private Capital.

Also securing funding have been treatment startups Nano-X, which has developed a smart radiotherapy machine, and Breathe Well, the startup behind a device that provides cancer patients with breath hold instructions to reduce the risks of radiotherapy.

Both startups earned funding through the NSW Department of Health’s Medical Device Fund, which aims to help recipients commercialise their technology. Issued last year, Nano-X received $2.5 million through the fund, while Breathe Well secured $1.3 million.

Generating the second largest portion of healthtech funding are startups in the marketplace segment, which have raised a total of $32.1 million. Skewing this segment ahead of others, however, is Perth-based startup HealthEngine, which offers an online booking platform for medical appointments.

HealthEngine has raised over $30 million to date, most recently closing a $20.3 million Series C round with participation from a group of VCs including Telstra Ventures and Seven West Media.

Meanwhile, the specialist segment, relating to startups developing technologies to support specific medical professionals, has raised $4.7 million.

OncosRes Medical, a Western Australian startup which has developed an imaging technology to assist surgeons, holds onto the majority of investment within the segment, with the business having raised $4.45 million earlier this year.

Looking at the biotech space, startups have raised a total of $87.8 million, with more than half of the funding helmed by Protagonist Therapeutics, which has developed orally-stable peptides that can be used to treat diseases.

While currently listed on the ASX, the Brisbane company raised over $50 million before going public, beginning with a $6 million Series A round back in 2006.

For comparison, Australian pharmaceutical startups have raised a total of $15.8 million.

Although greatly lower compared to biotech, a larger number of pharma startups have gone through acquisitions over the years, including RadPharm and Fibrotech Therapies, which was working to develop a drug for the treatment of fibrosis in kidney disease.

Helping startups in the space commercialise their ideas are government initiatives such as the Biomedical Translation Fund.

Introduced last year, the $500 million fund began investing in startups from early this year, with the fund managed by VC firms OneVentures, Brandon Capital, and BioScience Managers.

Despite Price Drop Could Dash Outperform Ethereum? – Oct 3 Analysis

On the short term it is very noticeable that all cryptocurrencies are going through a declining of-price phase after reaching important profit making marks. This was followed after bitcoin price hit almost the $4,500 mark on some exchanges where it met sellers losing surging steam and the descending trend initiated. One of the top-performing cryptocurrencies this year is DASH which as we speak is…

Source

What is the Luvabella doll, when do they launch in the UK and where can you buy one cheapest ahead of Christmas 2017?

AN artificial intelligence doll called Luvabella has been tipped as this Christmas’ must-have toy.

The toy, which has a recommended retail price of £99.99, hit shops on Sunday October 1 – and it’s already sold out in lots of shops.

The toy is tipped to be a sell out this Christmas
Luvabella

How much does Luvabella cost?

In better news, parents will be pleased to know there’s a way to get up to a third off the price.

Retail giant and Christmas present emporium Argos has included the doll in its 3 for 2 toy sale.

It means that if you team up with friends or have equally expensive toys to get for other children then you can get them for £66.66 each.

But you’ll have to be quick as Argos’ in store and online toy sale ends TOMORROW (October 3).

The toy is made by Spin Master – the company behind last year’s Christmas sell-out, Hatchimals – and has already featured in Argos’ top toy prediction list for this year.

But some parents think that the Luvbella doll has spooky resemblance to Chucky, the horror film character.

Where can I buy Luvabella cheapest and where is it in stock?

Most retailers started selling the doll on October 1
Luvabella

So far the cheapest place we’ve seen the Luvabella toy on sale is through the Argos 3 for 2 sale.

Although, if you don’t need to buy extra toys or don’t have a couple of friends to go in with, then it doesn’t really make financial sense.

Here are the cheapest prices we’ve seen:

How can I get alerted when Luvabella is in stock?

Many of the retailers will be getting their stock at different times.

But the clever bods at money saving website LatestDeals.co.uk have created a Luvabella stock checker.

You can sign up to get email alerts when the doll is in stores or online, ready to buy.

You can also sign up for alerts directly from retailers – including The Entertainer.

The doll is already selling out in some shops
Luvabella

How to save money on your Christmas shopping

CHRISTMAS is just around the corner, here's how to treat yourself without splashing too much cash.

  • LOOK FOR DISCOUNTS Visit websites like Vouchercloud, Myvouchercodes.co.uk and Vouchercodes.co.uk to look for discounts before buying.
  • EARN CASHBACK Before you buy anything, visit cashback websites like Quidco or TopCashback, to see if you could earn money for shopping.
  • COMPARE Find the cheapest deal buy using websites like Pricerunner.co.uk or Kelkoo.co.uk.
  • SIGN UP to newsletters. Most retailers will offer exclusive discounts to loyal shoppers.



We pay for your stories! Do you have a story for The Sun Online Money team? Email us at money@the-sun.co.uk or call 0207 78 24516


Artificial intelligence is about the people, not the machines

 It takes money to make money and right now a lot of that money is going into the development of artificial intelligence. Ray Dalio explains the importance of understanding and how he and his hedge fund, Bridgewater Associates, is approaching the technological shift. Read More

Chart: Are Today’s Students Prepared to Make Financial Decisions?

Chart: Are Today's Students Prepared to Make Financial Decisions?

Are Today’s Students Prepared to Make Financial Decisions?

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

In the “old days”, personal finance seemed so much more straightforward.

Wages were good enough so that almost anyone could save, and the power of compound interest did the rest. At the same time, it was cheap to get into the housing market, people were more conscious about debt, and the stock market was a no-brainer.

In today’s world, it’s not always so easy. Ultra-low interest rates have fueled a boom in debt and asset prices, making everything from houses to stocks very expensive. Meanwhile, students have accumulated $1.45 trillion in student debt, and grads will be squeezed for years attempting to pay it all off.

The Bold New World

In this challenging new landscape of personal finance, future generations would likely benefit from learning the basics around saving, making budgets, and investing, as well as how to evaluate major personal finance decisions like buying a home or paying for a college education.

Today’s chart looks at one facet of this, which is the percentage of high schools that currently require some sort of personal finance course to graduate.

Using data from a study by financial literacy non-profit Next Gen Personal Finance, it’s clear that the vast majority of students in the U.S. are not required to learn these basic skills and concepts – and things are particularly worse off in lower-income communities.

Access to Financial Literacy

After analyzing data from high schools representing over 85% of all students, the main conclusions of the study were as follows:

  • Only 16.4% of U.S. students are required to take a personal finance course to graduate high school.
  • Five states do have a personal finance requirement: Alabama, Missouri, Tennessee, Utah and Virginia.
  • But outside of these states, the proportion of students with a personal finance requirement drops to 8.6%.
  • Meanwhile, only 5.5% of low income schools (outside of mandate states) have personal finance as a requirement.

Why is this important?

To understand why financial literacy is important, look no further than the most recent grad class: millennials.

With $1.45 trillion in student debt, millennials find themselves in a tough spot to begin with – but 45% regret even taking out loans to that extent in the first place. At the same time, only 24% of the generation demonstrates “basic” financial knowledge, while 70% are already stressed about saving for retirement.

A better financial education could definitely help change some of these figures, whether it is through schools, or through vastly improved online resources that students access on their own volition.

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The post Chart: Are Today’s Students Prepared to Make Financial Decisions? appeared first on Visual Capitalist.

Anton Dziatkovskii the founder of MicroMoney appears on this episode of the Irish Tech News Podcast

I talk to Anton Dziatkovskii the founder of MicroMoney. Anton tells me about his background, when MicroMoney started and what does it do, how he will have MicroMoney as a $1 billion business by 2020, and how he saves every dollar to make sure MicroMoney grows faster. Anton also tells me about the token sale […]