John Spoto, CFP®, Author at FIGuide

Are you a left or right brain investor?

Apr 20 2012

In our last article we introduced the concept of behavioral finance which is a relatively new field that has been gaining importance over the last twenty years. Behavioral finance is the area of economics that studies how the financial decisions we make are influenced by factors beyond a purely logical analysis of the situations we face. Specifically it studies how our biases and emotions affect the manner and quality of our decision making.

Left and right brain

Much of the research conducted on how the brain operates suggests that the left and right sides of our brain perform different and …

Why Your Emotions Could Be Your Worst Enemy When Investing

Jan 12 2012

Emotions trump smarts

Making good financial decisions can be difficult, even for very smart people. One reason is that most people make decisions based in large part on their own biases and the emotions they are experiencing at the time rather than analyzing the facts. In other words, their choices are based more on what they are feeling rather than what they know. However most decisions, especially financial ones based on emotions, often turn out to be the wrong ones.

The difference between theory and practice

Conventional financial theory assumes that people make financial decisions based upon rational rather …

Here’s What’s Really Causing the European Debt Crisis

Nov 22 2011

In May 2010 the Eurozone countries and the International Monetary Fund agreed to a €110 billion low interest loan for Greece, conditional on the implementation of harsh austerity measures. The Greek bail-out was followed by a €85 billion rescue package for Ireland in November and a €78 billion bail-out for Portugal in May 2011.

Also in May 2010, in exchange for promises by its troubled members including Greece, Ireland Portugal, and Spain to implement significant austerity and other fiscally responsible measures, the EU approved a comprehensive rescue package worth €750 billion (then almost a trillion dollars). It is aimed at …

Why We Should Fear a European Debt Crises

Oct 25 2011

For individuals and families, their debt-to-income ratio says a lot about the state of their financial health. Generally, the lower the ratio the better because lower debt means less
money spent on interest payments and more money available for savings and investments. These can be used to fund important things like education or a new business, and to provide financial security to cover unexpected expenses or the loss of a job.

With countries, the debt-to-GDP ratio is one of the indicators of the health of an economy. It is the amount of national debt that a country is carrying as …

Understanding the European Debt Crisis – Part Two

Aug 30 2011

The European Union (EU) is an economic and political union of 27 sovereign (i.e. independent) member countries located primarily in Europe. The EU was created after World War II with the goal of fostering peace, economic cooperation and prosperity for its member countries. The EU has a combined population of over 500 million people and comprises about 25% of the world economy. The Council of the European Union is the EU’s main decision-making body, and each EU member country takes a turn to hold the Council Presidency for a six-month period. Every Council meeting is attended by one minister from …

Author - John Spoto, CFP®