The Unconscious Nudge: Behavioral science and its financial implications
Behavioral science and its financial implications
Have you ever thought of a time where there was just a lot of information coming at you? Have you ever thought that maybe not all of the information that was being presented to you was being consumed by your brain? The reality is that your brain acts like a filter. It disregards information that it deems to be unnecessary, and it accepts information it deems to be important. In a way, your brain is acting like a filter, and that filter nudges us to make certain decisions.
Direct Indexing and the IKEA Effect
The “IKEA effect” describes a cognitive bias that happens when people put in some form of labor to complete a project or finish a creation. Direct indexing won’t solve the behavior gap, but it has the potential to create better investor behaviors by allowing investors to play a larger role in the portfolio-building process.
Market Perspective: There are No Rewards Without Risk
2022 reminded investors of the risk from investing, but none of this makes losses palatable. As the old axiom goes, “there are no rewards without risk.” Here's perspective from Marta Norton, CIO, Americas, Morningstar Investment Management LLC.
Understanding the Motivations for Personalized Sustainable Investing
Approaches that promote a more sustainable society and economy align to a given client’s personal view—and it’s important for an advisor to understand each client’s objectives and preferences.