Daily Traders Edge

How your brain gets in the way of making smart money decisions – Yahoo!

July 13
14:06 2016

When it comes to money, everyone makes bad decisions. And it’s not because contributing to a 401(k) requires a PhD in physics. It’s often because our brains are hard-wired to prioritize short-term gains over long-term benefits.

“Traditional economic theory suggests that investors are rational decision-makers, carefully weighing all available information to make choices that result in the best possible outcome,” a Legg Mason report on behavioral finance explains.

Years of behavioral economic research have shown how untrue that is. Here are a few ways your brain trips you up and tips to help you avoid falling into these cognitive traps.

Continue Reading At Yahoo!

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