Paul Craven at HUM London 2023
Your Mind Plays Tricks - Three Investment Biases
At Humans Under Management London 2023, Paul Craven presented on the impact of cognitive biases in investment decision-making. With 30 years of experience in the City of London, including roles at leading financial firms, Craven offers a unique perspective on behavioural science.
The talk focuses on understanding the hidden biases that influence investment choices and the implications for financial advisers. It addresses the challenge of recognising these biases to improve decision-making and client outcomes.
Key Points:
- The bandwagon effect can lead to poor investment decisions based on herd mentality rather than solid analysis.
- Confirmation bias reinforces existing beliefs, making it difficult to question assumptions about investments.
- The sunk cost fallacy encourages advisers to continue investing in losing propositions due to prior commitments.
- Practical strategies, such as using checklists and decision diaries, can mitigate these biases and foster better investment practices.
Watching this video will equip financial advisers with insights to recognise and counteract biases, enhancing their investment strategies and client relationships.
