You are an award-winning academic and have published numerous works about decision-making by investors – drawing on insights gained during your time in fixed income sales and trading in London and New York. Based on your expertise, do you believe younger investors are more likely to disregard traditional advice and to follow the recommendations of social media influencers?
Unfortunately, yes. Social media has a way of amplifying success stories, while those who lose money remain silent. This creates bias and leads to false perceptions. I also believe that app-based trading has made trading too easy, and many small investors forget that they are trading against professionals with superior information. Without professional advice or demonstrably superior knowledge, trading is risky.
In your view which behavioural bias is most underestimated?
Confirmation bias. I would define this as the biased search for information, where individuals only seek content that supports their viewpoint, combined with the biased interpretation of information, where they process that information in a way that fits with their existing beliefs. Given the current information overload, it is important to filter content to some extent. However, this can also cause us to dismiss “disconfirming” evidence that we ought to consider.
Can AI help to counter these challenges − or is it more likely to exacerbate them?
Either outcome is possible. One can use AI to cherry-pick supporting evidence or to identify opposing arguments. I recently asked AI to analyse an email exchange between two parties in order to explore both perspectives. This helped me understand the other person’s viewpoint. When used effectively like that, AI can help us to view the world through a broader lens.
In view of the accelerated adoption of AI, do you think the Next Generation is sufficiently aware of aspects such as bias and misinformation?
I believe that digital natives, primarily the Next Generation, recognise the problem but may underestimate its scale. Crucially, misinformation or fake news can originate from trusted sources. Today, people often label something as “fake” simply because they disagree with it. In the UK’s debate on transgender issues, for example, the “no debate” approach was especially problematic as it presumes there is one clear set of facts and rejects scrutiny.
Can you elaborate on this point?
If you refuse to enter into a debate, you shut down the process of getting to the truth. Crucially, a state of agreement should not automatically be equated with the truth.
What is the best way to address the challenge posed by fake news? There are increasing calls in some quarters for some form of vetting (or censorship) to be introduced.
I would be uncomfortable with censorship. After all: Who decides what is right or wrong? Evidence evolves. We must be willing to change perspective. Critical thinking and open mindedness are essential. Successful people challenge their own blind spots; it is in our own interests to stay well informed.
You excel in a diverse range of activities, from academia and publishing to public speaking and board roles. What is the secret to your success?
Being involved in different activities is very energising. I think that my education gave me an excellent start in life. I attended a Montessori school, which encouraged its students to take a holistic approach – sports, music and drama were integral. If we studied Hadrian’s Wall, for example, we would visit it. Later, in my secondary school in the UK, early specialisation was the norm, but I pursued both arts and sciences – English and German alongside Mathematics and Economics. I believe I was the only person in a year of 160 students to study both English and Economics. That breadth has stood me in good stead during my career.
What is your approach to financial education?
At home, I emphasise the importance of money to teach the concept of opportunity cost – not to be materialistic. If my son asks for several toys, I explain to him that resources are scarce. If he tears his school shirt, I explain that it costs money to replace it. Understanding scarcity is foundational to financial literacy and beneficial for the planet. And speaking about the related topic of sustainability and how it can influence investment decisions, I would explain to my son that some sustainability choices involve trade-offs. For example, my research indicates that at present, high-emission companies deliver higher returns because they are not penalised for emissions. Conversely, some firms may choose to sacrifice part of their financial return for ethical reasons – and they need to be transparent about it. It is all about trade-offs.
Beyond academia, do you still find time for other interests?
Yes. I am passionate about sports. At Oxford University, I served as sports editor of the newspaper “The Oxford Student” and that honed my ability to communicate with a general audience and clearly convey my ideas beyond academia. I have deliberately ventured beyond the stereotypical academic path – giving interviews, writing books, delivering TED Talks and speaking at conferences. I used to row and play football, and today I compete in triathlon and Hyrox. I have found the discipline of sports and the sense of community they bring to be very formative.
In your view, what explains the growing appeal of community-based activities today?
Two factors stand out. First, there is now stronger evidence linking health and fitness to professional performance. Fitness reduces the occurrence of illness, enhances cognitive function and fosters a growth mindset because progress is measurable. Second, community matters. Hybrid and remote working can leave people feeling isolated. Fitness communities are supportive and energising environments. Even in races, participants encourage each other. This positivity can contrast with professional contexts where competition sometimes breeds negativity.
If you were to offer advice to the next generation of finance professionals and investors, what would it be?
Stay open-minded. Challenge your own viewpoint. Listen to people you disagree with.