Investing without blind spots

By Vanguard

Investing strategy

 

How investor biases and inertia affect portfolios and how to overcome them

Behavioural economics may not be the first thing investors think about when managing their portfolios, but it could be the missing link to better outcomes.

In this episode of Better Vantage, Andy Reed, head of investor behaviour research at Vanguard, shares how behavioural economics helps bridge the gap between what investors should do and what they actually do.

“Our job is to identify the gaps between what economists say is the normative thing to do and what people actually do with their money in the real world,” Reed said.

“Often with your portfolio, it’s not like you have five minutes to make a life-or-death decision,” he said. “But there are moments that matter, and if you make the right choice, you’ll be in a much better position over time.”

Reed also encourages listeners to check their financial blind spots and take advantage of strategies that align with their long-term goals.

 

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