Behavioural finance: How psychology affects investors

"Some of my biggest investment mistakes have happened when I've let my emotions take control", says Ed Bowsher. Ed's not alone in this, and business academics have increasingly focused on this subject, known as 'behavioural finance'. 

In this video, Ed explains three well-known 'biases' that humans have, and which can lead to poor investment returns.  



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Video categories


Bonds

How corporate bonds work

Video tutorial: How corporate bonds work

In this video, Ed Bowsher looks at how risky corporate bonds are, and whether they’re a good investment for most people.

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Central banks

What is deflation and what does it mean for you?

Video tutorial: What is deflation and what does it mean for you?

If we get deflation, it could bring the current economic recovery to a halt, and hit share prices. Ed Bowsher explains what deflation is, the chances of it actually happening, and how it would affect you.

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Derivatives

What are derivatives?

Derivatives video

Tim Bennett explains what derivatives are, and how you can use them to your advantage.

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Financial crime

What is the swaps scandal all about?

Swaps scandal video

Our largest banks now stand accused of mis-selling swaps. Tim Bennett explains how this latest scandal could land them with their biggest compensation bill yet.

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Financial statements

What is a profit warning?

Video tutorial - what is a profits warning?

Ed Bowsher explains what a ‘profit warning’ is, and how you should react if a company you own warns that profits will disappoint investors.

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Key players

Why hedge funds can be good news

Video tutorial: why hedge funds can be good news

Hedge funds perform a valuable service by weeding out overvalued shares. In this video, Ed Bowsher explains some of the things they look for when they’re hunting for shares to short.

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Tax

The end of the death tax

Video tutorial: The end of the death tax

Ed Bowsher looks at how the latest changes to the pension rules – the so-called ‘death tax’ – will affect you.

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Ratios

Why profit margins are really useful

Video tutorial - why profit margins matter

In this video, Ed Bowsher explains how to calculate a company’s profit margin, why it is the best way to evaluate profitability, and how you can use it when analysing a company.

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Trading & investments

Behavioural finance: How psychology affects investors

Behavioural Finance: How psychology affects investors video still

In this video, Ed Bowsher looks at ‘behavioural finance’ – the study of how our emotions and our psyches can affect our investments.

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Personal finance

How to make more money from your pension

How to make more money from your pension

In this video, Ed Bowsher looks at ‘pension recycling’. This is where you take money out of your pension pot, and then pay it back in, getting further tax relief from HMRC.

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