Long time listeners and viewers will know that I have a fascination with the whole subject of behavioral finance.

This is simply because there is no bigger determinant of your future financial success

than your own behavior towards money.

And if it's that big a deal, then I figured I should dedicate a few videos to it, starting today. There are lots of different behavioral traits often called biases that we bring to bear

whenever we make financial decisions.

So I'm going to spend a few weeks dealing with these one at a time.

That should keep each video fairly short, which is always good news,

but we'll see. I have a tendency to overrun.

And first, I want to deal with something called

self-attribution bias so let's put five minutes on the clock down here say a quick

thank you to my friends at seven investment management for continuing to sponsor the show and let's crack on.

Put simply, self-attribution bias is where we take credit for the good things that happen,

specifically with our finances in this case, when in fact those

good things had nothing to do with us at all.

The Americans might call this the drinking your own Kool-Aid bias.

Here in Britain we're more likely to just call it the up-ar-sales bias.

Good job I make myself laugh isn't it? So taking credit for things that we have no business

taking credit for in the success of our finances.

How might this manifest?

Well let's say we pick a fund that does really well.

We might look back at the performance of that fund and congratulate ourselves, pat ourselves on the back

for how well we did in choosing that fund. Look out Warren Buffett and Charlie Munger,

...