Connecting with future you

Learning to love your future self

It’s February, deep in the blahs of winter, and clients are behaving oddly: they’re less willing to buy risky equities and more inclined to sell higher-risk holdings. That’s because large segments of the population “are becoming either clinically depressed or mildly more despondent,” says Lisa Kramer, professor of finance at the University of Toronto. Her research has found that the further investors live from the equator, the greater variation there is in returns among the seasons. Advisors who can recognize these tendencies and explain them to clients can prevent those clients from making financial decisions they’ll later regret. Kramer’s research is part of the growing study of behavioural economics applicable to investing, or behavioural finance. ….[READ]