The September rally that wasn't supposed to happen
"As might be expected, the hot trend these days is behavioural. (That’s apart
from the painful soul-searching among prominent economists who discovered in the
current global crisis that their cherished beliefs about free markets were not
scientific truths.)
Last month, Prof. Mahar posted a summary of a
psychological study showing that temptation is a much stronger force than people
realize. He wondered jokingly if the Lord’s Prayer might make for useful
financial advice.
His own solution to curb irrational tendencies? Make a
plan in advance and put the whole investing process on autopilot. “Take the
discretion out of investing so you won’t be able to take unwise chances or take
risks that a rational investor would not.” "
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