The behavioral deals of finance deal with psychological side of decisions that are made for the financial aspects. One of the most important concepts which relate to how the people approach finance is regret aversion. You should be aware about it and you should also have enough knowledge about how to deal with it. Have you avoided or stalled about deciding on something? Were you skeptical about regretting the decision that you made? Have you placed all your money in bank instead of investing it in a place where it is more risk because you were scared that you would regret it later? These are all common mistakes and you aren’t alone. It is called regret aversion and you basically avoid making any financial decisions or don’t go anywhere except the ultra safe route just because you might  [...] 

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The vocabulary of an investor is interesting to say the least. Finance involves a number of big words that make the financial concepts stand for seem much more difficult that they actually are. However worse comes to the worst when two traders start talking slang.  An outsider may fall in a faint with the effort of keeping up with talk like “Printing on the O”, “jigged out” “Bo Derek” and more. This short guide will teach you how to talk the talk, and hopefully you’ll pick up more from conversations. Blue Chip . . . Blue Chip Companies are the mammoths of the market, the very cream of the crop. These companies have a proven ability of surviving in both good and bad market situations. These stocks tend to be quite expensive to purchase, but can be invested in for safety. Companies  [...] 

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At times mistakes in the process of investing stop us from attaining our savings goals. This article will inform you about certain myths can results in investment mistakes. Often we feel that planning for retirement can only be done when a person grows old. This stops us from making investments when we are young. However, the fact is that the earlier you will start investing the better will be your life after retirement. Another common investment myths is that FD is the best investment option one can have. It’s true having FDs is a nice way of investing, but one should never invest all his money in FDs. Post tax returns of FDs hardly becomes successful in beating the inflation. Investments that do not beat inflation will decrease the purchasing power of the money saved by you. So, the fact  [...] 

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The wave of new recession is on full throttle with Japan under deep financial stress, European Union dumped with sovereign debt and America facing unemployment and inflation bites at the fullest. In such scenario of fiscal squeeze staring, a common man will always find the task of investing intimidating and shall find the option of investing every penny a hairy task. It is for sure that a person will look for fair investing tips to stay afloat.  The fluctuating economic status is another peril that the investors have to cope up with. While one day they find a company is doing well and publishing record profits, the other day the profit swoons randomly. This makes the present situation a tough time for investors. Here are few safe investing tips for the year 2011. The priority on investing  [...] 

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Investing in share market and other options are now a common matter in every country. I have seen people investing out of impulse since someone in their close relation has earned a hefty return. People may earn in fluke but consistently getting a reasonable return on investment needs knowledge. One needs to know the different types of investments to choose the perfect one for him. By saying perfect I mean a type or types of investment that will suit an investor’s risk appetite. The realm of investment has increased now as investment option shave increase by many folds. With countless types of investments, choosing an investment options becomes a minefield for an investor. There can be several investment options each having a peppy name. But broadly there are three types of investments; they  [...] 

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I am, by my very nature, somewhat cynical it has to be said. I’m not necessarily a party pooper, but I am just always on my guard. Yes, I have my moments of optimism, but they are few and far in between. It is perhaps for this very reason that I am not made a fool of by finances and investment schemes. I like to believe that I can smell a scamster coming from a mile away and I would like to say that I have never been scammed by anyone, but that would be untrue. Sadly, my money and I have been parted on one occasion by investment schemes that looked better from afar. It was a penny stock that got the better of me, and looking back on it now I can only laugh at the entire setup and think about how gullible even the best of us can be sometimes. It was dumb, yes, and rather stupid too. But can  [...] 

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Think of investors to be like rats following the tune of the Pied Piper and think of the world of investments as a place laden with many traps. Of all the traps that can be set out for gullible investors, perhaps the most common type is something tied to insurance. On the part of investors there is plenty of confusion and misinformation surrounding this but on the part of the companies too there is plenty of mischief and misinformation too, most of it quite deliberate. I can’t tell you the number of times I have had people tell me they have this “thing” in their portfolio that is insured against losing money. And that’s when my alarm bells go off and I realize that an equity index annuity has been sold to someone. Most people I know of are happily looking at mutual funds. Some use index  [...] 

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The global economy, after the recession, has not recovered yet. The economy remains still infested with inflation, low rate rates of interest and other perils that are gradually scooping out the saving of a common man. Often I feel confused when I sit with pen and paper to chalk out my financial plan. I fail to take the right financial decision for me and my family after scribbling over an hour. In such a situation of high financial risks, one can only hope to earn through investing in an intelligent way. Very recently, I went through some useful tips on investing released by Bankrate.com. They have taken in consideration the current economic scenarios and have advised accordingly. The fundamental investment tip is purely about defining the goals of your life. You need to sit and make a list  [...] 

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Take a close look at the investment expenses that you have to pay out and you might perhaps begin to understand exactly how your investment returns have not been as good as you think they should be. Every small bit of savings when it comes to cutting expenses can boost your long term profitability massively. Every dollar saved is a dollar earned when it comes to investing. It is a question of weighing up the costs that you are having to pay out against the value you are receiving for it and if you have more potential to lose money than make money thanks to some expense, it is time to trim the fat so you can maximize your investment returns. Note though that in some circumstances higher expenses are the norm. it is only sometimes that expenses represent an erosion of your wealth that you should  [...] 

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Humans can be herded and manipulated so easily it isn’t funny. If something is in the news, it is suddenly very popular or unpopular by its very nature. Nobody really had much against the banking system prior to the recent meltdown that has crippled the global economy, but the moment they were painted as the villains of the piece everyone got on that bandwagon as well. It is perhaps a logical extension of the “keeping up with the Joneses” mentality that manifests itself in behavioral finance as well. This is why I say that you should never invest in headlining stocks. Warren Buffett was right on the money when he said that when others are being greedy, be fearful. It pays to swim against the tide more often than not. That’s how Black Swans work, but let’s talk about that another day,  [...] 

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Here’s the simplest possible definition of a tracking error that I can give you. A tracking error is the extent to which the performance of any given portfolio varies from the benchmark to which it is linked. It is in some ways a measure of standard deviation from a norm. Let’s assume you own index funds of some kind that are linked to a stock exchange or a commodities exchange. If this ETF is not tracking the index perfectly, it is said to have a tracking error. It is most definitely a cause of concern for you as an investor if this happens since it is indicative of potentially much deeper problems. And if they aren’t already, the alarm bells should be going off for you any time…now. Even for a portfolio, a tracking error can exist. Let’s say the stock market in a given year is doing  [...] 

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