We investors like to think we’re rational. We carefully weigh the facts, analyze the fundamentals, and make smart decisions with our money. Except… we’re human. And when it comes to investing, humans can behave a lot more like a herd of wildebeest than a lion stalking its prey. We chase what’s hot, panic when things fall, and routinely get swept up in the mood of the market. Our guest today argues that markets can look like they’re being driven by cold, hard economic fundamentals, when underneath it all, investor sentiment can be pulling the strings. In his new book, The Madness of Markets, Alex Edmans discusses that AND what individual investors can do about it. Alex is a writer, speaker, and professor of finance at London Business School. We discuss:
How sports outcomes can impact market sentiment and stock prices
Investing should be based on personal circumstances and risk tolerance
Corporate culture can be a predictor of company performance
Speculation can be a part of investing, but should be limited
Playing it too safe can lead to significant financial losses
International diversification can protect against domestic downturns
Understanding your own investment psychology is key to success
Investing in the stock market generally yields good returns
And much more!

Can’t get enough How To Money? Here are some additional ways to get ahead with your personal finances:
YouTube: You thought you’d never see it… the How To Money channel over on YouTube - LIKE and SUBSCRIBE!
Credit card perks: Check out our favorite credit cards that we use to maximize rewards and optimize our spending.
Other money nerds: Find a thriving community of fellow money nerds by joining the HTM Facebook group!
Newsletter: Sign up for the weekly HTM newsletter. It’s fun, free, & practical.
Money Gears: knowing what to do with your money is crucial to your personal finance journey.
MG7: and maybe you’re well on your way to financial independence but you’re looking for some financial reassurance, that’s when heading over to HowToMoney.com/Advisor and getting matched with a highly vetted financial advisor makes sense.

 

And please help us to spread the word by letting friends and family know about How to Money! Hit the share button, subscribe if you’re not already a regular listener, and give us a quick review in Apple Podcasts or wherever you get your podcasts. Help us to change the conversation around personal finance and get more people doing smart things with their money!

 

Best friends out!

We investors like to think we&rsquo;re rational. We carefully weigh the facts, analyze the fundamentals, and make smart decisions with our money. Except&hellip; we&rsquo;re human. And when it comes to investing, humans can behave a lot more like a herd of wildebeest than a lion stalking its prey. We chase what&rsquo;s hot, panic when things fall, and routinely get swept up in the mood of the market. Our guest today argues that markets can look like they&rsquo;re being driven by cold, hard economic fundamentals, when underneath it all, investor sentiment can be pulling the strings. In his new book, <a href="https://amzn.to/4hA3SEO">The Madness of Markets</a>, Alex Edmans discusses that AND what individual investors can do about it. Alex is a writer, speaker, and professor of finance at London Business School. We discuss:
<ul>
<li aria-level="1">How sports outcomes can impact market sentiment and stock prices</li>
<li aria-level="1">Investing should be based on personal circumstances and risk tolerance</li>
<li aria-level="1">Corporate culture can be a predictor of company performance</li>
<li aria-level="1">Speculation can be a part of investing, but should be limited</li>
<li aria-level="1">Playing it too safe can lead to significant financial losses</li>
<li aria-level="1">International diversification can protect against domestic downturns</li>
<li aria-level="1">Understanding your own investment psychology is key to success</li>
<li aria-level="1">Investing in the stock market generally yields good returns</li>
<li aria-level="1">And much more!</li>
</ul>
Can&rsquo;t get enough How To Money? Here are some additional ways to get ahead with your personal finances:
<ul>
<li aria-level="1">YouTube: You thought you&rsquo;d never see it&hellip; the <a href="https://www.youtube.com/@HowToMoneyPod">How To Money channel over on YouTube</a> - LIKE and SUBSCRIBE!</li>
<li aria-level="1">Credit card perks: Check out <a href="https://go.nextcard.com/tkfe5ek-htmpodcast">our favorite credit cards</a> that we use to maximize rewards and optimize our spending.</li>
<li aria-level="1">Other money nerds: Find a thriving community of fellow money nerds by joining the <a href="https://www.facebook.com/groups/1623670287732189">HTM Facebook group!</a></li>
<li aria-level="1">Newsletter: Sign up for the weekly <a href="https://www.howtomoney.com/newsletter/">HTM newsletter</a>. It&rsquo;s fun, free, &amp; practical.</li>
<li aria-level="1">Money Gears: knowing <a href="https://www.howtomoney.com/start-here/">what to do with your money</a> is crucial to your personal finance journey.</li>
<ul>
<li aria-level="2">MG7: and maybe you&rsquo;re well on your way to financial independence but you&rsquo;re looking for some financial reassurance, that&rsquo;s when heading over to <a href="http://www.howtomoney.com/advisor">HowToMoney.com/Advisor</a> and getting matched with a highly vetted financial advisor makes sense.</li>
</ul>
</ul>
&nbsp;
And please help us to spread the word by letting friends and family know about How to Money! Hit the share button, subscribe if you&rsquo;re not already a regular listener, and <a href="https://podcasts.apple.com/us/podcast/how-to-money/id1337718773?mt=2">give us a quick review in Apple Podcasts</a> or wherever you get your podcasts. Help us to change the conversation around personal finance and get more people doing smart things with their money!
&nbsp;
Best friends out!

Best friends Joel and Matt are the co-hosts of How to Money which is all about providing the knowledge & tools that normal folks need to thrive in areas like debt payoff, DIY investing, and crucial money tricks that will provide continuous help along your journey. We believe that access to unbiased and jargon-free personal finance guidance is more necessary than ever before. When you handle your money in a purposeful, thoughtful way that works for your lifestyle, you can really start living a rich life.

How to Money

Why Smart Investors Make Crazy Decisions w/ Alex Edmans #1211

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/af71f6a5-9f3c-4ffe-bd5d-b4d40138a2ae/transcript