Denmark

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Behavioural Finance

We like to think we invest rationally, but the field of behavioural finance has shown there are social, emotional, and even cognitive factors that can affect our investing decisions. Watch the videos below to help you become aware of these unconscious tendencies, and have a better chance of meeting your long-term investing goals.

Lesson One: Availability Bias
Lesson Two: Herding
Lesson Three: Home Country Bias
Lesson Four: Loss Aversion

Lesson One: Availability Bias

Our thinking is greatly influenced by what is personally most relevant, recent or dramatic. The 2008 financial crisis continues to be at the forefront of many investors’ minds, but a focus on past losses can keep you from seeing the opportunities ahead.

Is loss aversion keeping you out of the stock markets?


 

Lesson Two: Herding

Herding is the idea that people are more comfortable investing their money in the same way as the majority of others at any given time. Unfortunately, when it comes to investing, herd mentality may significantly impact long-term results.

Are you investing to meet your own goals or just following the crowd?


 

Lesson Three: Home Country Bias

If you could build the ultimate football team, chances are you would choose the best players from around the world rather than just from Denmark. Likewise, when investing, it makes sense to look outside Denmark.

Is supporting the home team costing you money?


 

Lesson Four: Loss Aversion

Hitting a golf ball into the water can feel twice as bad as hitting it safely on to the green, so golfers will often look for a safer option - even at the cost of adding strokes to their round. Likewise, volatile markets can tempt investors to avoid risk rather than face the possibility of a loss.

Is loss aversion making you lose sight of your long-term goals?


 

 

Next Steps

The videos above on behavioural finance provide some insight on the factors that can influence your investment decisions.

When it comes to considering your investment goals, Franklin Templeton Investments has a range of funds which take a long term view, leveraging disciplined, time-tested strategies and assessing risk as thoroughly as they seek reward.

View our funds. 

Important Information

This material is intended to be of general interest only and does not constitute professional investment advice. Franklin Templeton Investments shall not be liable to any user of this document or to any other person or entity for the inaccuracy of information or any errors or omissions in its contents, regardless of the cause of such inaccuracy, error or omission.

The value of shares and income from them may fall as well as rise and investors may not get back the full amount invested. Indices are unmanaged and you can not invest directly in an index. Past performance is not a guide to future performance.

For more information please contact: Franklin Templeton Investments, Blasieholmsgatan 5, SE-111 48, Stockholm, Sweden.

Issued by Franklin Templeton Investment Management Limited (FTIML) Registered office: Cannon Place, 78 Cannon Street, London, EC4N 6HL. FTIML is authorised and regulated by the Financial Conduct Authority and are authorised to conduct investment business in Denmark by the Finanstilsynet, in Sweden by the Finansinspektionen, in Norway with Kredittilsynet, and in Finland with Rahoitustarkastuksen.