The Solomon Secret by Fleet Bruce

Author:Fleet, Bruce
Language: eng
Format: epub
Publisher: PENGUIN group
Published: 2010-02-28T16:00:00+00:00

FANCY TERMS AND SIMPLE IDEAS

Here are two very important lessons; the first is from me, the second from King Solomon. If you choose to believe only one, then please take the latter. (I don’t suggest that my advice is on par with Solomon’s.)

First, “If it were easy, everyone would be doing it.” Second, as Solomon said, “He who trusts in himself is a fool, but he who walks in wisdom is kept safe” (Proverbs 28:26). So what do we do now? Let’s learn about ourselves.

There is a fascinating area of study called “behavioral finance.” Numerous books and articles have been written on the subject. My intention here is simply to introduce you to the idea. Hopefully, this will spark your interest and help you to avoid the more common mistakes associated with “do it yourself” investing.

So what is behavioral finance? Albert Phung described it this way:According to conventional financial theory, the world and its participants are, for the most part, rational “wealth maximiz ers.” However, there are many instances where emotion and psychology influence our decisions, causing us to behave in unpredictable or irrational ways. Behavioral finance is a relatively new field that seeks to combine behavioral and cognitive psychological theory with conventional economics and finance to provide explanations for why people make irrational financial decisions.3

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