Train Your Brain to Be a Better Investor

Training your brain to focus could help overcome behavioural biases and make you a better investor. We explain how to create a roadmap for behavioural performance

Dan Kemp 21 February, 2017 | 11:41AM

“Be fearful when others are greedy and greedy only when others are fearful” is one of the most famous investment quotes of the last 15 years. Of course, this was written by Warren Buffett as a way of demonstrating his contrarian behavioural philosophy, yet most investors can attest to the difficulty of implementing his wisdom.

In the ups and downs of life, people are often required to face complex financial decisions – whether they should save, spend or invest at a simplistic level - and the final decision is heavily influenced by risk, probability, prior experience and social interactions. This often leads to gut reactions and the ‘F’ word – feeling; common emotional responses among individuals trying to understand the best way forward. The question we pose is whether it is right to trust your gut? What can we do to make better decisions? For this, we can draw on some lessons from high performance training and neuroscience.

Learning the Right Things

We are usually taught that the learning cycle follows a simple trajectory, whereby time and performance are positively correlated.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Dan Kemp

Dan Kemp  is Chief Investment Officer, Morningstar Investment Management EMEA

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