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I enjoyed my recent conversation with Finance professor Meir Statman of Santa Clara University, which is just down the street from the NGPF offices. Meir conducted some of the earliest research in what we now know as behavioral finance. He discusses his book, Finance for Normal People, and shares his insights about how investing should be taught in school (spoiler alert: Keep It Simple!). He also describes his approach to playing the stock market game and why fees matter so much when comparing investment options. You will know more about investing after you listen to Prof. Statman. Enjoy!
Details:

  • 0:00~1:26 – Introduction
  • 1:26~5:44 – Professor Statman’s background
  • 5:44~7:52 – Own investing experience and effects on research
  • 7:52~9:30 – State of behavioral finance in the 1980s
  • 9:30~10:33 – Position as financial analyst
  • 10:33~12:53 – Early research interests
  • 12:53~18:27 – First research on solving the dividend puzzle
  • 18:27~21:02 – Why write his new book, Finance for Normal People?
  • 21:02~23:39 – Cognitive errors normal people make
  • 23:39~26:24 – Overconfidence and investing
  • 26:24~26:43 – A word from our sponsor, Next Gen Personal Finance
  • 26:43~29:27 – What role does emotion play in investing
  • 29:27~36:24 – Young investors and risk
  • 36:24~38:02 – Stock market game
  • 38:02~41:33 – Active versus passive funds
  • 41:33~43:22 – Core concepts of investing that every high school student should know
  • 43:22~46:15 – Problems with investment fees
  • 46:15~48:48 – Making index funds interesting
  • 48:48~53:12 – Importance of financial literacy
  • 53:12~54:52 – Favorite lesson to teach
  • 54:52~55:52 – Conclusion
Resource:
Quote:
  • “You can be cool and I feel really really cool only investing in index funds and I wear it with pride because what it says is that I am too smart to be fooled by those promises of high returns from beating the market”