Are you a financial wizard?


I am a big fan of Harry Potter, if you haven’t read the books or seen the movies then this post will be very confusing. Sometimes my kids think that I am a wizard when it comes to money. It seems that I just have to wave my magic wand and money appears. I wish it was that easy.

I believe that behavioural phycology plays a bigger role than analytical skills in successful investing. What kind of financial wizard are you?


Ron can be scared and confused sometimes when it comes to investing. He wants to invest, he knows that he should! He comes from a family of very good investors which intimates him. There are periods that his investments aren’t very good but every so often he does comes up with a brilliant investment idea.



Harry is a bold and reckless investor. He jumps in without thinking. Even when he does make an investment plan, something always goes wrong. He has a lot of natural talent but most of his successes comes from just blind luck. Without the aid of his investing friends, he would have lost everything.


Snape is a market timer and sometimes a day trader. He thinks he is smarter than the whole market. He can invest for the  long-term or short sell the market. He gets in and gets out of the market numerous times but ends up losing everything. (Snape could also represent the mind set of Hedge fund managers)


Dumbledore is an overconfident and arrogant type investor. Although, he is very knowledgeable and a seasoned investor, he refuses to get any advice. He makes many mistakes which eventually destroys his portfolio.



Hermione is a hard-working, dedicated and insightful investor. She comes from a non-investing family but that doesn’t discourage her from being the best in her class. She is always doing research and see things that others miss. She is always prepare and reacts well to pressure. She not only invests wisely, she knows how to protect her portfolio and gets excellent investment results.



These people look like they all work on Wall Street?


When it comes to making investment decisions, does gender play a role? There are some interesting theories and studies available. I found these two thought-provoking:

“A six-year study by two professors, Brad Barber and Terrance Odean, found that men trade 45% more than women, and it reduces their net returns by 2.65 percentage points per year as opposed to 1.72 percentage points for women. The study involved using account data for over 35,000 households from a large discount brokerage.”

“There are three significant ways in which men and women differ on financial decisions, as described in a new analysis by Nelli Oster, director and investment strategist at BlackRock. “Several studies, including a national survey by LPL Financial, show that women tend to research investments in depth before making portfolio decisions, and the process, as a result, tends to take more time,” explained Oster. “Women also tend to be more patient as investors and consult their advisors before adjusting their portfolio positioning, whereas men are more prone to market timing impulses. To gather information, women often prefer group discussions to men’s more independent learning approach.”

What do you think, does gender play a role in making investment decisions? Which fictional character above defines your investment decision making process?




2 thoughts on “Are you a financial wizard?

  1. At the risk of starting a comment war, there are, on average, philosophical (gatherer) vs (hunter) differences between women and men. Sure there are exceptions but, as your article points out, women tend to seek advice from others more often. After all, all the jokes about men not reading instructions or asking for directions have to come from somewhere – right? 😉 As for me, I think my style of investing depends on the market conditions at the time. Lately I’ve been doing more reading than investing but once a good confirmed uptrend takes place, my guess is I will be doing just the opposite.


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