Ian's list

Top picks from the web on money and your life, from ING economist Ian Bright – June 11, 2014

Bank of mum and dad

Bank of mum and dad

When needing to borrow money, asking friends or family might seem like an easy option. This is probably why more than £12.6 billion a year is changing hands in the United Kingdom via the “IOU” method, according to the Money Advice Service. It cites Payments Council figures that show the biggest chunk of this sum is money borrowed by children from their parents. But borrowing money from loved ones can be complicated and it recommends accurately recording details and setting rules, such as a payback date.

Buy, sell, or hold

Buy, sell, or hold

Words from well-known financial professionals can affect investor behaviour in unexpected ways, a blog on Market Watch says. Victor Ricciardi, co-editor of Investor Behaviour, writes that before making investment decisions investors should be aware of familiarity bias (seeing something in a positive light because we recognise it). He noted that the buy-sell-hold recommendation a professional might give can be a reason to research further, rather than a reason to simply follow the recommendation.

Materialistic society

Materialistic society

Modern life may be a reason people tend to give an irrationally high value to their possessions, research by psychologist Coren Apicella suggests. This is also known as the endowment effect. Experiments carried out found that the Hadza Bushmen of Northern Tanzania (a population of hunter-gatherers) living in isolated regions do not display the endowment effect, while Hazda living in a region with more exposure to tourism and markets do – suggesting that the endowment effect is a learned behaviour.

InvestingBehaviour

Ian Bright
Ian Bright

Senior economist at ING
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