If an idea dominates the headlines, we notice it.
But maybe we shouldn’t.
Today’s guest, psychologist and behavioral finance expert Dr. Daniel Crosby, says there’s a difference between a prediction that gets repeated, and one that’s likely to unfold.
What’s salient isn’t accurate, he says. And vice versa.
He also talks about how money problems have morphed over time. He chats about how our evolutionary wiring is at odds with our goals. And he even discusses how we’re wired to be ‘lazy’ – and how to work with that tendency instead of fighting an uphill battle against it.
Dr. Crosby researches the intersection of mind and markets. His latest work, The Behavioral Investor, is an in-depth look at how sociology, psychology and neurology impact our investment choices.
Timing of discussion points as of November 2022:
03:10: The overlap between psychology and investing + new ideas
04:41: Counterintuitive behavioral finance discoveries
07:27: Money as a “hygiene factor”
08:39: The “new class” of money problems for the more affluent
13:44: Factors that impact our financial decisions
15:22: The influence of evolutionary wiring
17:02: Cognitive and physical wiring leading to laziness and group think
27:45: The benefit of community for investors
28:52: The four types of behavioral risk: ego, conservatism, attention, and emotion
36:21: The three E’s of behavior change: education, environment, encouragement
42:30: Confusing things that are loud with things that are likely
45:21: The risk of managing emotion
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