Interactive Investor

How to avoid painful investing pitfalls

16th March 2023 08:52

by the interactive investor team from interactive investor

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Can you invest without emotion? Mick Dillon, of Brown Advisory, is one of the few fund managers to use behavioural finance biases as an integral part of his investment process. In this episode, he joins Kyle to focus on two in particular that cause us to make irrational investment decisions: inertia, which causes investors to place a higher value on something they own so are reluctant to sell; and loss aversion, which leads investors to hold on to an investment that has dropped in value in the hope it will recover.

Books mentioned in this episode:
Nudge by Richard Thaler

Influence: The Psychology Of Persuasion by Robert Cialdini
Pre-suasion by Robert Cialdini

Tell us your thoughts and join the conversation by emailing us at OTM@ii.co.uk. Ask a question, tell us what you want us to talk about, or simply share your views.

On The Money is an interactive investor (ii) podcast. For more investment news and ideas, visit https://www.ii.co.uk/stock-market-news.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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