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Is Your Brain Wired for Wealth? By Jason Zweig, MONEY Magazine Staff Writer
Suddenly, stunning investment insights are coming from the frontiers of one of the least likely fields you could imagine: neuroscience. In university and hospital laboratories around the world, researchers are using the latest breakthroughs in technology to trace the exact circuitry your brain uses to make the kinds of decisions you rely on as an investor.
For the first time in any nonscientific publication, this article will take you deep inside your own brain to help you understand why you invest the way you do - and, more important, how to enhance the workings of your brain to get better results.
You'll see that the neuroscience of investing helps explain one puzzle after another: why we chronically buy high and sell low, why "predictable" growth stocks sell at such high prices, why it's so hard to understand our own risk tolerance until we lose money, why we keep buying IPOs and "hot funds" despite all the evidence that we shouldn't, why stocks that miss earnings forecasts by a penny can lose billions of dollars of market value in seconds.
Click on "Go" to read full article...
This Is Your Brain On Money by Matthew Herper via Forbes Six years ago, Stanford brain scientist Brian Knutson accidentally set neuroscience and economics on a collision course. Knutson wanted to use MRI scanners - the same devices used in medical diagnosis - to literally peer inside people's heads as they experienced intense emotions. He tried showing volunteers pictures of nude and decapitated bodies. But those reactions paled compared with what happened when he offered people cash.
“Do you have a wealthy brain?” via CNN Money
The editors of Money Magazine have created a 5-question quiz to answer the question: is your brain wired for wealth? Click the title to take it... free
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