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People are unwittingly taking risks with their investments by entrusting them to advisers who are biased but don’t know it.
Does your financial adviser tell you to hold on and never sell? That markets recover in the long run? Does your adviser seem to always have an optimistic disposition? Do they tell you not to worry, no matter what is going on in the outside world?
In Bullshift, John J. De Goey explores the hidden relationship between bias and financial markets. He makes clear that investors and financial advisers are not the rational decision makers that economic theory assumes them to be, and that “tried and true” investment advice is not always sound. De Goey shows that advisers are immersed in a culture of Bullshift — they simply don’t realize how their positive outlook on markets is based on industry-wide groupthink.
Unfortunately, this problem affects much more than just your own investment portfolio. After three years of an international pandemic, the full economic impact of the response to it still hasn’t been felt. There’s more pain coming, but the financial industry’s eternal optimism, abetted by government policies designed to consistently encourage growth and avoid tough choices, is walking us toward a cliff for the global economy.
De Goey helps readers understand the subtle but profound challenges of industry bias, with optimism bias as a particularly vexing issue. The next downturn may be deeper than anything you or your adviser has ever experienced. True optimism comes from a shift to unbiased realism.
Does your financial adviser tell you to hold on and never sell? That markets recover in the long run? Does your adviser seem to always have an optimistic disposition? Do they tell you not to worry, no matter what is going on in the outside world?
In Bullshift, John J. De Goey explores the hidden relationship between bias and financial markets. He makes clear that investors and financial advisers are not the rational decision makers that economic theory assumes them to be, and that “tried and true” investment advice is not always sound. De Goey shows that advisers are immersed in a culture of Bullshift — they simply don’t realize how their positive outlook on markets is based on industry-wide groupthink.
Unfortunately, this problem affects much more than just your own investment portfolio. After three years of an international pandemic, the full economic impact of the response to it still hasn’t been felt. There’s more pain coming, but the financial industry’s eternal optimism, abetted by government policies designed to consistently encourage growth and avoid tough choices, is walking us toward a cliff for the global economy.
De Goey helps readers understand the subtle but profound challenges of industry bias, with optimism bias as a particularly vexing issue. The next downturn may be deeper than anything you or your adviser has ever experienced. True optimism comes from a shift to unbiased realism.
Price: $21.99
Pages: 224
Publisher: Dundurn Press
Imprint: Dundurn Press
Publication Date:
31 January 2023
Trim Size: 9.00 X 6.00 in
ISBN: 9781459750906
Format: Paperback
BISACs:
BUSINESS & ECONOMICS / Personal Finance / Money Management, Personal finance, BUSINESS & ECONOMICS / Personal Finance / Investing, BUSINESS & ECONOMICS / Investments & Securities / Portfolio Management, Investment and securities
Bullshift is a kick-in-the-head reality check for advisers and their clients about blindly following investing clichés. Read it and learn to question your basic understanding of investing.
Excessive optimism is the metabias that enables all others, as it tells us that ‘all is well’ and blinds us to our own fallibility. Bullshift recognizes the damaging potential of overconfidence for our financial lives and gives practical tips on how to overcome it.
If you want to be money smart, read Bullshift. John's decades of experience, wisdom, and guidance will leave you richer.
There’s a large body of evidence that behavioural biases are a significant reason why so many investors fail to achieve their investment goals. Overconfidence is particularly deeply ingrained. We think — and are encouraged by the media and financial commentators to think — that we can do things that are beyond our sphere of competence. We’re all prone to overconfidence and optimism and we need to help each other in guarding against it.
Long a maverick in the Canadian financial advisor community, John J. De Goey's third book is an erudite exposition of how unwarranted optimism can be detrimental to the financial health of portfolios.
From broad behavioural errors to the specifics of Canadian markets, Bullshift offers new ways for financial advisors to evaluate their thinking and achieve better outcomes. It’s packed with useful insight on how to make more informed, rational decisions.
De Goey provides investors with an entertaining overview of how our brains get in the way of maximizing our financial potential. Perhaps more importantly, he links these biases to what is happening in the world today around us and provides prescriptions on how to optimize our behaviour.
There’s a new kind of advisor coming to the forefront of wealth management. These days, advisers who are more focused on behaviour and decisions are winning business. Understanding what drives client attitudes is a winning proposition for keeping them focused on what’s important to their clients.
A truly wonderful read and an important book that will help so many people solve the puzzle that is understanding themselves, their money, and their behaviours.
Excessive optimism is the metabias that enables all others, as it tells us that ‘all is well’ and blinds us to our own fallibility. Bullshift recognizes the damaging potential of overconfidence for our financial lives and gives practical tips on how to overcome it.
If you want to be money smart, read Bullshift. John's decades of experience, wisdom, and guidance will leave you richer.
There’s a large body of evidence that behavioural biases are a significant reason why so many investors fail to achieve their investment goals. Overconfidence is particularly deeply ingrained. We think — and are encouraged by the media and financial commentators to think — that we can do things that are beyond our sphere of competence. We’re all prone to overconfidence and optimism and we need to help each other in guarding against it.
Long a maverick in the Canadian financial advisor community, John J. De Goey's third book is an erudite exposition of how unwarranted optimism can be detrimental to the financial health of portfolios.
From broad behavioural errors to the specifics of Canadian markets, Bullshift offers new ways for financial advisors to evaluate their thinking and achieve better outcomes. It’s packed with useful insight on how to make more informed, rational decisions.
De Goey provides investors with an entertaining overview of how our brains get in the way of maximizing our financial potential. Perhaps more importantly, he links these biases to what is happening in the world today around us and provides prescriptions on how to optimize our behaviour.
There’s a new kind of advisor coming to the forefront of wealth management. These days, advisers who are more focused on behaviour and decisions are winning business. Understanding what drives client attitudes is a winning proposition for keeping them focused on what’s important to their clients.
A truly wonderful read and an important book that will help so many people solve the puzzle that is understanding themselves, their money, and their behaviours.
John J. De Goey is an author, senior investment advisor, and portfolio manager at Wellington-Altus Private Wealth. With over twenty-five years of industry experience, he is a sought-after commentator, a frequent BNN guest, and a recognized industry thought leader. He lives in Toronto.
- Introduction
- Part I: The Interplay Between Behavioural Economics, Financial Advisers, and Retail Investors
- 1 Understanding Advisers and the Industry
- 2 Behavioural Economics and Human Biases
- 3 The Role of Advisers
- 4 What Needs to Change?
- 5 Groupthink Among Advisers
- Part II: Applying What We Know to How the World Operates … and How It Ought To
- 6 Misguided and Human
- 7 Case Study on the Coronavirus
- 8 Case Studies in Financial Planning
- 9 How the Government Entrenches Bullshift
- 10 Guarding Against Bullshift
- Afterword: What Can Be Done About Bullshift?
- Acknowledgements
- Bibliography
- Index
- About the Author