BlackRock’s psych team (yes) hunts for bias in trades

Portfolio managers asked to keep ‘trade diaries’ of the thinking that led up to poor investments

BlackRock is trying to identify unconscious biases in portfolio managers' thinking that might be leaving returns on the table. The firm is also toying with the idea of wearable technology to measure stress.

BlackRock has assembled a team of psychologists and quants who are directing some portfolio managers to record their decision processes in “trade diaries” to uncover where cognitive biases might have led them to sell stocks too soon or hold on too long.  

In a related, somewhat curious effort, the firm is also looking into kitting out portfolio managers with wearable technology to measure their stress levels.

The psych team is digging into portfolio managers’ behaviour to root out instances of

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