We present five short illustrations of behavioural biases that can be very damaging to your wealth. The psychology that drives behavioural finance is one of the most rapidly developing scientific fields of research in the area of investing. We have explored the academic papers produced by leaders in this field, both past and present. We have tried to make these vignettes both interesting and entertaining. We hope you enjoy what you are about to read … and urge you to apply what you learn in both your investment and other important aspects of life.

The first quarter of 2019 was distinctly different, and much improved, from the final quarter of last year.  Stock markets which had slumped badly recovered just as quickly, erasing the losses of late-2018 within a few months.

This giant of economic thinking wrote the following in his book, The Economic Consequences of the Peace, published in 1919, a year after the end of WWI: ‘If we aim deliberately at the impoverishment of Central Europe, vengeance, I dare predict, will not limp. Nothing can then delay for very long that final war between the forces of Reaction and the despairing consequences of Revolution, before which the horrors of the late German war will fade into nothing.’