After few meetings with the client you asked about her past investments. The downtown home was an
Question:
After few meetings with the client you asked about her past investments. The downtown home was an idea of her boyfriend whom she met few years after the divorce. He showed several properties in downtown Nice and how they have been decreasing in price for the last two years. After she bought, the price went down further? She knew that she shouldn't easily trust his argument, but she had some leftovers from the divorce settlement which were perfect for the down payment of the house.
She read on Internet the 'age rule' of investment, so she put 35% in bond and 20% in gold when she was 55. When she reached 60, she thought 60% were too much, so put 32% in bond and 18% in gold, the rest in blue-chip stocks, the majority of which were invested in France and Spain. Her friend's venture is in health care, just like her stocks? Unfortunately, she was not able to attend much of shareholder meetings, but she believes that her friends should have regularly notified the status of the company. Otherwise, she could have given better advice.
Please list behavioural biases you observe in this case (with evidence)?
South-Western Federal Taxation 2020 Comprehensive
ISBN: 9780357109144
43rd Edition
Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman