What happens inside our brains when we think about money? Quite a lot, actually, and some of it isn't good for our financial health. InYour Money and Your Brain,Jason Zweig explains why smart people make stupid financial decisions -- and what they can do to avoid these mistakes. Zweig, a veteran financial journalist, draws on the latest research in neuroeconomics, a fascinating new discipline that combines psychology, neuroscience, and economics to better understand financial decision making. He shows why we often misunderstand risk and why we tend to be overconfident about our investment decisions.Your Money and Your Brainoffers some radical new insights into investing and shows investors how to take control of the battlefield between reason and emotion.Your Money and Your Brainis as entertaining as it is enlightening. In the course of his research, Zweig visited leading neuroscience laboratories and subjected himself to numerous experiments. He blends anecdotes from these experiences with stories about investing mistakes, including confessions of stupidity from some highly successful people. Then he draws lessons and offers original practical steps that investors can take to make wiser decisions.Anyone who has ever looked back on a financial decision and said, "How could I have been so stupid?" will benefit from reading this book.
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Do you fret over the value of your investments on a daily basis? Do you buy stocks based on a hunch or a gut feeling? According to Zweig, the latest scientific evidence shows that this common behavior usually results in financial loss and is caused by the way our brain reacts when we think about money. According to recent research in the emerging science of neuroeconomics, the pleasure center in the brain that is stimulated in anticipation of the big payout is the same area that is affected during sex or drug use and is responsible for the addiction to gambling. Our brains, which evolved more than 200,000 years ago to react quickly to patterns and minute changes in our environment, are not equipped to handle the randomness of the stock market; but nevertheless we attempt to create meaningful patterns where there are none and base our investment decisions on erroneous assumptions. The good news is that awareness of this phenomenon can make us better investors, and Zweig offers some simple tips to avoid the pitfalls, such as taking the long view and avoiding overtrading.--Siegfried, David Copyright 2007 Booklist
Distributed by Syndetic Solutions, Inc.
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