4min chapter

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#32 Dr Daniel Crosby - Your Brain is Not Designed to Trade or Invest

The AlphaMind Podcast

CHAPTER

Rational Behavior in Financial Markets

A lot of the talk around behavioral finance is about rational behavior. I think a superior term is adaptive because whether something is adaptive or maladaptive takes context into account. There's all sorts of things you could do that are not rational in the strictly utility maximizing the benefits. But, but it's adaptive right like I'm my family and I are about to pay off our house. And our interest rate on the house is lower than what I assume I could make in the market. So in some ways it's an irrational behavior for me to put money down on a house where I could invest that in the marketsand potentially achieve a superior return.

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