New training to help investors cut their losses

Investors could soon train their brains to let go of bad investments and cut their losses, with a new program developed by Monash University researchers aiming to teach people how to make better financial decisions.

The findings, led by Dr Kristian Rotaru from Monash Business School, start with overcoming the natural unwillingness to walk away without making a profit.

Rotaru said the theory applies to any market where assets can appreciate or depreciate, including cars and property, and it was tested on individuals investing both their own capital and the capital of others.

Related News:

“Once you really want to help someone, you become a more ‘procedurally rational’ decision maker – with a tendency to follow a specific strategy that could be potentially explained to the client,” he said.

“People may not find it as easy to convince their client to hold on to a losing asset for too long in the hope of market reversal.”

Rotaru said the next step was to train people to become better decision-makers, especially those investing on behalf of other people.

 




Related Content

New advice tech to rival XPLAN

A new comprehensive advice solution, CCUBE Integrated Wealth, has launched to help advisers report and meet compliance obligations, and could be an al...Read more

Wilsons expands adviser capabilities

Financial advisory firm, Wilsons, has appointed Casimir Skillecorn and Daniel Pitt as senior advisers in its private wealth business. Industry veteran...Read more

Platinum AM posts lower revenue

The challenging investment market in the second half of last year saw Platinum Asset Management’s total revenue down by close to 30 per cent decreas...Read more

Author

Comments

Add new comment