To spend or to save? That is the choice for anyone with spare cash. The in­ter­nal conflict we experience between our immediate desires and our re­spon­si­bi­li­ty towards our future has been recognised since ancient times, and is now stu­died scientifically in the burgeoning field of behavioural finance.
Investors save rather spend some of their money in the expectation of in­creased spending power. The price paid for the higher spending power is post­ponement and exposure to risk. This book examines how delay and risk may influence personal investment decisions. Three main questions are ad­dressed through innovative empirical research: Can the increasing value of com­pound interest returns justify the delay to their receipt? How do risk and in­vest­ment term jointly affect the appeal of investments? How do investors choose on the basis of historical returns while knowing that past returns may not predict future returns?
This title will appeal to psychologists, economists, finance professionals and re­searchers seeking understanding of how personal investment decisions are ma­de, and how delayed and uncertain rewards are valued.