7IM's Ben Kumar: When behavioural biases are not all they seem

Investment identity more important

Over the last decade or so, it has been fashionable to talk about irrational investors – the tendency for people not to do what a model of rationality would suggest.

The work of Thinking, Fast and Slow author Daniel Kahneman is usually mentioned; maybe Nudge author Richard Thaler. And often the perspective has been one where someone's ‘bias' is leading them away from the ‘correct behaviour'. The thing is, that is not quite right. The word ‘behaviour' muddles two things – what you do and who you are. Activity and identity. The Big Question: What is the next ETF megatrend? In other areas, we are really careful not to do that. An obvious example is with children. There are some activities we want to encourage for every child, whether it is wearing...