People are unwittingly taking risks with their investments by entrusting them to advisers who are biased but don’t know it.
Does your financial adviser tell you to hold on and never sell? That markets recover in the long run? Does your adviser seem to always have an optimistic disposition? Do they tell you not to worry, no matter what is going on in the outside world?
In Bullshift, John J. De Goey explores the hidden relationship between bias and financial markets. He makes clear that investors and financial advisers are not the rational decision makers that economic theory assumes them to be, and that “tried and true” investment advice is not always sound. De Goey shows that advisers are immersed in a culture of Bullshift — they simply don’t realize how their positive outlook on markets is based on industry-wide groupthink.
Unfortunately, this problem affects much more than just your own investment portfolio. After three years of an international pandemic, the full economic impact of the response to it still hasn’t been felt. There’s more pain coming, but the financial industry’s eternal optimism, abetted by government policies designed to consistently encourage growth and avoid tough choices, is walking us toward a cliff for the global economy.
De Goey helps readers understand the subtle but profound challenges of industry bias, with optimism bias as a particularly vexing issue. The next downturn may be deeper than anything you or your adviser has ever experienced. True optimism comes from a shift to unbiased realism.
Does your financial adviser tell you to hold on and never sell? That markets recover in the long run? Does your adviser seem to always have an optimistic disposition? Do they tell you not to worry, no matter what is going on in the outside world?
In Bullshift, John J. De Goey explores the hidden relationship between bias and financial markets. He makes clear that investors and financial advisers are not the rational decision makers that economic theory assumes them to be, and that “tried and true” investment advice is not always sound. De Goey shows that advisers are immersed in a culture of Bullshift — they simply don’t realize how their positive outlook on markets is based on industry-wide groupthink.
Unfortunately, this problem affects much more than just your own investment portfolio. After three years of an international pandemic, the full economic impact of the response to it still hasn’t been felt. There’s more pain coming, but the financial industry’s eternal optimism, abetted by government policies designed to consistently encourage growth and avoid tough choices, is walking us toward a cliff for the global economy.
De Goey helps readers understand the subtle but profound challenges of industry bias, with optimism bias as a particularly vexing issue. The next downturn may be deeper than anything you or your adviser has ever experienced. True optimism comes from a shift to unbiased realism.
Authors
- Pages
- 224
- Published in
- Toronto, CA
Table of Contents
- Cover 1
- Praise 3
- Half Title 5
- Title 7
- Copyright 8
- Dedication 9
- Contents 11
- Introduction 13
- Part I: The Interplay Between Behavioural Economics, Financial Advisers, and Retail Investors 15
- 1 Understanding Advisers and the Industry 17
- 2 Behavioural Economics and Human Biases 25
- 3 The Role of Advisers 41
- 4 What Needs to Change? 53
- 5 Groupthink Among Advisers 73
- Part II: Applying What We Know to How the World Operates … and How It Ought To 87
- 6 Misguided and Human 89
- 7 Case Study on the Coronavirus 109
- 8 Case Studies in Financial Planning 137
- 9 How the Government Entrenches Bullshift 157
- 10 Guarding Against Bullshift 177
- Afterword: What Can Be Done About Bullshift? 201
- Acknowledgements 205
- Bibliography 209
- Index 213
- About the Author 221