Addressing investment biases

Capricorn Group hosts Inspire session
Making smart and informed choices when investing money involves understanding how our natural biases can sometimes affect our decision-making in saving and investing.
In today’s rapidly evolving world of finance and investment, understanding the impact of our biases and emotions on our decision-making processes is more crucial than ever. It is against this background that the Capricorn Group and its subsidiary Capricorn Asset Management hosted an Inspire event on Wednesday, where investment experts shared some insights on how to tackle bias when it comes to investment decisions.
Held under the theme “Exploring biases in investment decisions”, the session was headlined by Capricorn Asset Management’s Chief Investment Officer Relf Lumley; senior associate at Stonehage Fleming and board member of CFA Society South Africa JD van Wyk; and Institutional Manager at Capricorn Asset Management Elina Shikomba.
The discussion provided a thorough analysis of how behavioural finance plays a role in affecting market outcomes.
“Behavioural finance helps us understand how financial decisions around things like investments, payments, risk and personal debt are greatly influenced by human emotion, biases and cognitive limitations of the mind in processing and responding to information,” Relf said.
The investment experts explained how concepts such as mental accounting, self-attribution, herd behaviour and emotional gaps affect irrational investment choices.
The Inspire session concluded with a talk by JD, highlighting the career options available in the investment industry and the various employment opportunities a CFA qualification can provide.
Successful track record
“Capricorn Group’s Inspired sessions have a successful track record of presenting thought-provoking topics presented by experts in various fields,” said one of the attendees, Edward Dunaiski. “As Connectors of Positive Change we are committed to adding value for our stakeholders through sessions like this in partnership with our subsidiary, Capricorn Asset Management.
“I found the discussion points relevant, given that many decisions we make are impulse-driven or media-driven, so looking at how to review your own financial behaviour and habits is the starting point in your financial journey. And you can then go to budgeting, looking at your risk profile and then engage financial advisors.”
This was the 15th edition of the Capricorn Group’s Inspire session. The sessions are thought-provoking thought leadership information events geared towards inspiring our employees, stakeholders and the public by stirring up conversations with mind-shifting potential. Capricorn Group has, over the years, become synonymous with these Inspire events, featuring well-known thought leaders in the past.