Roy Walker IFA - Financial Adviser In Dubai

So, you’re in the pub one evening, and a friend tells you about some fancy ‘investment’ called cryptocurrency. It all sounds a bit fishy. “I’ve been getting eight percent growth per month”, he says. You do the maths on your phone… $100 would become $108 after the first month. Then $117 after the second month. Then $126 the third. By the end of a year, it would be $252. That’s an annualised growth rate of 152% per annum. “Ok. Tell me more”, you say. You’re still a bit sceptical, but you drop $100 into the crypto. ~ ~ ~ A month later, you’re back in the pub. “What do you think?”, says your friend. “Not bad, I’m up seventeen bucks”, you say. “Well, I’ve been putting in a thousand a month. I started ten months ago. My investment is now worth $15,650. Make hay while the sun shines, my friend!” ~ ~ ~ You get it. There’s an opportunity here. Your drinking buddy is onto something. That evening you go online and look through all those old bank accounts you’ve forgotten about. You manage to scra...

Often we may start by buying a home to live in; it makes more sense to pay our own mortgage rather than rent a place and pay the landlord’s mortgage . ‘Getting on the rungs of the property ladder’ is common priority for many young couples. However with rising job mobility and larger sums needed for initial deposits, many people are rightly delaying a property purchase for a few years, rather than taking on financial obligations that would affect flexibility in the growth stages of a career. Property is an important asset class that should form part of our long term savings & investment strategy . However, matters such as home ownership are a personal and sometimes emotive subject. I make a point never to underestimate the sentimental factors that come to bear when I work with clients in this area. People often make financial decisions with an emotional bias , and this is seen nowhere more profoundly than with property. Your home in retirement In the long run, most of us should plan...

Emotion and psychology play a critical role in the strategy of private investors. Unfortunately, this is almost always a bad thing. When prices go through the roof, so many of us feel euphoric and want to invest more at exactly the wrong time. When prices collapse, we feel miserable (and for some that ‘pit in the stomach’ is a physical reaction) and may feel like walking away from the market, never to return. Figure: Investor Emotion Given that each of us implicitly understands the single most important rule of investing - Buy Low, Sell High - how can it be that the vast majority of the investing public behave in such an irrational way? And, what can we do about it, as individual investors? Lessons From Behavioural Finance Behavioural Finance is the field of study that overlaps psychology with conventional financial theory, to help provide explanations for why investors behave illogically so much of the time. Over recent years behavioural finance has given us some useful insights ab...