The Foolish Corner: Avoiding Mind Traps in Personal Financial Decisions

When we get near money, our decision-making processes often go haywire. It's like placing a compass next to a magnet-we can't figure out which direction is north, and our finances can head south as a result.

Within the growing academic field of behavioral finance, researchers are discovering just how easily we are swayed by subtle emotional forces, no matter how hard we try to make rational choices. Do you hate losing a hundred dollars more than you love receiving a hundred dollars? Are you reluctant to make an investment if the people around you aren't doing so? These kinds of mental biases have a huge-though often unnoticed-influence on our decisions about money.

In The Foolish Corner, finance expert John Howe offers an introduction to these biases, showing you how to locate them in your own approach to money and uncover their effects on your life. Learn how to head off these subliminal influences-and sometimes even use them to your advantage.

John Howe, PhD, CFA(R), is chair of the Department of Finance at the University of Missouri, where he has taught finance for more than two decades and has received awards for excellence in teaching. His writings on banking, corporate finance, corporate governance, and behavioral finance have been published extensively in major finance and accounting journals. Howe has also taught at the University of Cambridge and has trained investment professionals in Zurich at one of Switzerland's largest banks. He is a long-standing member of the editorial board of the CFA Digest, the primary publication of the Chartered Financial Analyst Institute.

Robb Corrigan is a London-based communications, marketing, and branding consultant, focusing on the asset-management industry. He has nearly two decades of experience working at major financial firms and start-ups in the United States and Europe, including serving as global head of corporate communications for Barclays Global Investors, global head of communications for Man Group PLC, and head of marketing communications in Europe, the Middle East, and Africa for Merrill Lynch.