The Davy annual conference will be addressed tonight by Carl Richards, a New York Times Columnist and advisor. Mr Richards is the author of a book called "The Behaviour Gap", which advocates taking the emotion out of investment decisions.
"Very few of us have got round to the idea of understanding the role of emotion in the investment process. We are emotional about money. What we do with it represents our greatest fears, doubts and worries. To think that emotion doesn't enter that process is a big mistake," Mr Richards explains.
He says the start of the process of understanding that is to divorce ourselves from the herd mentality. "You have to firstly understand that we are comfortable in groups. When everyone else is excited we get excited. We end up doing the exact opposite of what we should do," he says. "Everyone is excited, the market is going well. We rush in to buy. That's buying high. Everyone else is worrying, the market is falling. We sell. That's selling low. It's the exact opposite of what we should be doing."
The author cites recent international stock market moves as an example. "Back up four or five years, a whole generation swore they'd never buy stocks again. Here we are now after a 120% run in markets. Suddenly, people are saying 'maybe I should be getting back into stocks'," he explains. He advocates remaining involved in investment decisions rather than simply handing them over to a third party and hoping for the best. "Having a third party is a good idea. Hopefully they can act as a check on our behaviour. They're a co-pilot but you're the only one who knows the goals. You've to clearly communicate those and then it's reflected in a plan built for you," he says.
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MORNING BRIEFS - Britain's Financial Conduct Authority has launched a full investigation into Tesco's recent £250m accounting error which resulted in it overstating its expected half year results. The accounting scandal resulted in £3 billion being wiped off the company's market value.
*** Two new routes are being announced for Dublin airport this morning. Icelandic carrier WOW air will launch the first direct service between Dublin and Reykjavik from next summer. The year round service will fly three times per week between Dublin and the Icelandic capital from June. WOW is a low-cost carrier that currently operates 16 routes from its home base in Iceland. And Aer Lingus Regional, operated by Stobart Air, is announcing the addition of East Midlands Airport in the UK to its Dublin route network. Twice daily flights will start in early February.
*** Growth in the manufacturing continued for a 15th successive month in September according to the latest Purchasing Managers Index from Investec Bank Ireland. It was down slightly on August's robust performance but the sector is still putting in solid growth with increased orders from home and abroad. Progress is expected to continue during 2015 despite the continuation of geopolitical tensions. The employment index registered growth for the 16th month in a row.
*** Goodbody chief economist Dermot O'Leary has upgraded its growth forecasts for 2014, bringing them into line with estimates from the Department of Finance. The Minister recently upgraded his forecasts for the year pencilling in growth of over 4.5% in GDP terms, up from 3% previously. Goodbody now says it expects GDP to register growth of 5.3% this year - up from 3.5% - putting Ireland at the top of the league table for growth in the euro area. They also upgraded the outlook for next year to 4% growth - that is up from a previous estimate of 3.6%.
*** UDG Healthcare, formerly United Drug, has formalised its partnership with Japanese firm CMIC creating a joint venture. UDG will take a 49.9% stake in the group. The company said the move will give it a stronger foothold in the Japanese market.
*** Microsoft will make available a 'technical preview' of its new Windows 10, which it announced yesterday. The company is skipping 9 and going straight to Windows 10, the final release of which is being scheduled from mid to late 2015. The highlight feature is the return of the familiar start menu that disappeared in Windows 8, to many user's annoyance.
