We are all biased people, easily influenced by other people or even our own experiences. These biases can influence your ability to make the right decisions and even come in the way of you achieving success. The best thing is that these biases can easily be addressed through small nudges and disciplined practices that push you in a certain direction. However, you must be mindful that nudges can push you in the right or wrong direction.
Summary
In the book, “Nudge: Improving Decisions About Health, Wealth, and Happiness’, authors Richard H. Thaler and Cass R. Sunstein explore how we make different choices and suggest how we can make better decisions. Listen to this Podcast by Edelweiss MF to learn how you can make an optimal investment checklist.
Key takeaways:
· Decisions that you as an individual make are impacted by biases and different sets of information
· Anchoring, overconfidence, status quo bias, and familiarity are all examples of biases.
· On the other hand, nudges can also influence and push you towards both right and wrong decisions.
· Anything from the way a certain argument is framed to marketing and social media influencers can act as a nudge
· In investing, the Record, Evaluate, and Compare Alternative Prices (RECAP) framework can act as a good nudge.
The book really is revelatory and can make you stop and think the next time you are about to make a decision. You can listen to the podcast on the Edelweiss Mutual Fund website, Spotify, Google Podcasts, and Apple Podcast. We hope you enjoyed this podcast and will tune in to listen to more such podcasts on investing nuggets.