Topic
Behavioural Finance
The reason your portfolio underperforms the funds inside it. These articles cover the biases, the research, and the fixes.
The single biggest finding in behavioural finance is that investors earn lower returns than the funds they own. Morningstar's Mind the Gap study has run for years and consistently shows a gap of 1-2 percentage points annually between fund returns and investor returns - because investors buy after good years and sell after bad ones. Across a thirty-year horizon, that gap roughly halves your final pot.
These articles cover the biases that produce that gap and the structural fixes that defeat them. Thinking, Fast and Slow covers Kahneman's two-system framework applied to investing. Predictably Irrational covers Ariely's three biggest money biases. The Art of Thinking Clearly is the most accessible behavioural finance book for a reader new to the field. Auto-Enrolment: How Britain Became a Nation of Investors is what happens when policymakers actually act on behavioural research.
6 articles
Auto-Enrolment: How Britain Became a Nation of Investors
Around 10 million UK workers now own global equities. Almost none of them would have signed up. Nobody voted for it. It's the biggest change to British household finance in 50 years.
Storytellers vs Number Crunchers: Which Investor Are You?
Damodaran says every investor leans Storyteller or Number Cruncher. The interesting bit is what each side consistently misses. Most retail portfolios sit on one and never notice.
Predictably Irrational: 3 Biases That Cost You Money
MIT ran the same auction twice. Cash bidders and card bidders. Same product, same room. One group paid up to twice as much, and they had no idea why.
The Art of Thinking Clearly: Finance Lessons
Losing £1,000 hurts roughly twice as much as winning £1,000 feels good. That single quirk of your brain costs UK investors more than fees, tax, and bad timing combined.
Thinking Fast and Slow: Investing Lessons
A Nobel laureate spent his career proving your brain runs two systems. One of them is in charge when you panic-sell. The other is what your spreadsheet thinks you are using.
Irrational Exuberance: Shiller's Guide to Bubbles
Shiller published Irrational Exuberance weeks before the dot-com crash. His one ratio still works, and what it is saying about US markets in 2026 is uncomfortable.