DailyFinance.comhttp://www.dailyfinance.comDailyFinance.com%http://www.blogsmithmedia.com/BlogURL%/media/feedlogo.gifDailyFinance.comhttp://www.dailyfinance.comen-usCopyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only.Blogsmith http://www.blogsmith.com/Economist Advises: For a Happier Christmas, Spend Lesshttp://www.dailyfinance.com/2009/12/19/economist-advises-for-a-happier-christmas-spend-less/http://www.dailyfinance.com/2009/12/19/economist-advises-for-a-happier-christmas-spend-less/http://www.dailyfinance.com/2009/12/19/economist-advises-for-a-happier-christmas-spend-less/#commentsFiled under:

When Dan Ariely recently took his kids to a birthday party, he didn't expect a lesson in how to celebrate the holidays, let alone a tutorial in economics. But as clowns and inflatables entertained the children and the parents feasted on wine and sushi, he found himself pining for old fashioned birthday cake and soda. For Ariely, a behavioral economist and author of Predictably Irrational, it was a near-perfect example of what's known in his trade as a social coordination problem, and a big demonstration of why many people grow to dislike what should be festive occasions. Put simply, our parties and gifts need to be on par with our peers' or we become unhappy.

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]]>ChristmasDuke Universitygift givingJames ArielyElizabeth HarrisSat, 19 Dec 2009 17:41:00 ESTInvestors, stay in the game: Loss aversion causes big losses over long termhttp://www.dailyfinance.com/2009/11/28/investors-stay-in-the-game-loss-aversion-causes-big-losses-ove/http://www.dailyfinance.com/2009/11/28/investors-stay-in-the-game-loss-aversion-causes-big-losses-ove/http://www.dailyfinance.com/2009/11/28/investors-stay-in-the-game-loss-aversion-causes-big-losses-ove/#commentsFiled under:

When a friend recently told me she wanted to invest more money in bonds, I was surprised. Not just because we rarely discuss specific investments. (I'm uncomfortable giving friends financial advice for obvious reasons). But mostly because she's considering loading up on bonds right now. Wow, bad timing.

So despite my self-imposed rule to not interfere, I couldn't help blurting out, "Are you sure? Don't you already have bonds?" She said she did, but then added how much she appreciates bond funds' regular gains. Of course it's a natural impulse to seek security. But my friend's dilemma illustrates a classic case of what behavioral economists call loss aversion.

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]]>Antonio Damasiobond marketbondsInvestingLegg MasonLegg Mason Capital Managementlossloss aversionMichael MauboussinMorningstarstocksElizabeth HarrisSat, 28 Nov 2009 12:15:00 ESTA lonely wiki on Wall Streethttp://www.dailyfinance.com/2009/11/20/a-lonely-wiki-on-wall-street/http://www.dailyfinance.com/2009/11/20/a-lonely-wiki-on-wall-street/http://www.dailyfinance.com/2009/11/20/a-lonely-wiki-on-wall-street/#commentsFiled under:

It seemed like a good idea at the time. Last month the Museum of American Finance on Wall Street, which collects all manner of physical financial artifacts ranging from ticker tape to board games like "Rich Uncle: The Stock Market Game," launched a wiki with hopes of gathering financial tales, too.

But the site has attracted just one main contributor since it went live in October. The featured personal story was posted by "Ninja Dad," a finance executive who writes about the pre-credit crisis days of freewheeling loans to homebuyers like his daughter with no income, no job or assets, (aka the NINJA borrower).

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]]>Elizabeth HarrisFri, 20 Nov 2009 18:30:00 ESTBill Belichick: Coaching like a master investorhttp://www.dailyfinance.com/2009/11/18/bill-belichick-coaching-like-a-master-investor/http://www.dailyfinance.com/2009/11/18/bill-belichick-coaching-like-a-master-investor/http://www.dailyfinance.com/2009/11/18/bill-belichick-coaching-like-a-master-investor/#commentsFiled under: ,

bill-belichick-coaching-like-a-master-investorNew England Patriots' fans may still be in pain over coach Bill Belichick's risky, and failed, choice to throw a pass for a first down when he was at fourth-and-two against the Indianapolis Colts on Sunday night. On the Pats' 28-yard line with just over two minutes on the clock, the botched play eventually cost New England the game, leading to Monday morning quarterbacking that dragged all the way into Tuesday.

It's not much consolation for the Pats, but there's an investing lesson here, says Michael Mauboussin, chief investment strategist with Legg Mason Capital Management and author of Think Twice: Harnessing the Power of Counterintuition. The question comes down to how you make your choices -- whether you're a football coach or an investor. Do you make your decisions based on a well-honed process or based on the eventual outcome?

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]]>Belichickfootballfourth downInvestmentinvestornew englandnew england patriotspatriotsprocessriskstrategyElizabeth HarrisWed, 18 Nov 2009 12:20:00 ESTWhy investors mis-time markets -- and how you can avoid their mistakehttp://www.dailyfinance.com/2009/11/16/why-investors-mis-time-markets-and-how-you-can-avoid-their-mi/http://www.dailyfinance.com/2009/11/16/why-investors-mis-time-markets-and-how-you-can-avoid-their-mi/http://www.dailyfinance.com/2009/11/16/why-investors-mis-time-markets-and-how-you-can-avoid-their-mi/#commentsFiled under: ,

why-investors-mis-time-markets-and-how-you-can-avoid-itFor millions of mutual fund investors, Dow 10,000 was an awkward milestone. In October alone, as markets crested following an eight-month run-up in stock prices, investors put the largest monthly amount into bond funds since 1984 -- a record $48.4 billion. Meanwhile they yanked $15.5 billion out of their domestic stock funds, according to California-based TrimTabs Investment Research, which tracks investment flows. So far this year, retail clients have poured a record $327.2 billion in new investments into bond funds.

It's more than just profit-taking. "It's been a consistent investor response all year, and that's been 'stick as much money as you can into a bond fund,'" according to Charles Biderman, chief executive of TrimTabs. If history is any guide, they'll soon find they've made yet another investing mistake when bonds crater, as they will once the Federal Reserve begins hiking interest rates.

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]]>bond fundsbondsCrashmutual fundmutual fund managersMutual fundspsychologystock markettop funds 2008trendtrendsElizabeth HarrisMon, 16 Nov 2009 14:00:00 EST