Are Men Irrational Investors?

Last week, Richard Thaler won the Nobel Prize in Economics, joining a select group of Economic royalty including Simon Kuznets, grandfather of national income accounting, John Nash, inspiration for the Oscar-winning A Beautiful Mind, and Robert Shiller, one of the few prominent economics to predict the recent financial crisis. And Thaler's achievements? Well, he basically showed us that we are all morons.

Thaler is a prominent part of the Behavioural Economics movement that has highlighted our natural irrationality. One way we demonstrate this irrationality is overconfidence, as seen in investor and trading behaviour.   

Investment advisors will tell you new investors exhibit two particular attributes, excitement and fear. Usually, the excitement new investors feel trumps the fear they display. Those of us who saw Wolf of Wall Street could feel the adrenaline rushing through Jordan Belfort during the high moments of the film. Trading is exciting, and Wall Street is glamorous,