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Daniel Kahneman, Renowned Psychologist and Economist, Passes Away at Age 90
Daniel Kahneman, who passed away at the age of 90, was a remarkable individual who made significant contributions to the field of economics through his groundbreaking work in psychology. Despite never taking an economics course, Kahneman paved the way for a psychologically based branch of economics that earned him a Nobel Prize in Economic Sciences in 2002. His partner, Barbara Tversky, confirmed his death on Wednesday, although the location was not disclosed.
Associated with Princeton University for many years and residing in Manhattan, Professor Kahneman utilized his background in psychology to establish behavioral economics. His collaboration with Amos Tversky, a cognitive psychologist from Stanford, led to a reexamination of various topics such as medical malpractice, international diplomacy, and talent evaluation in baseball. The duo challenged the conventional wisdom of traditional economics, which assumes rational decision-making, by highlighting inherent cognitive biases that shape human judgment.
The concept of loss-aversion was one of the key findings of Kahneman’s research, illustrating why individuals tend to experience greater distress from a loss compared to the pleasure derived from a similar gain. This theory has implications in areas like financial investing and sports performance, demonstrating how psychological factors influence decision-making.
Renowned psychologist Steven Pinker emphasized the significance of Kahneman’s work, underscoring the importance of understanding human biases to make better personal and societal decisions. Kahneman’s humility and eagerness to engage in dialogue with critics and colleagues alike further underscored his commitment to refining his ideas.
Kahneman’s impact extended beyond academia, with his book “Thinking, Fast and Slow” becoming a bestseller and earning accolades from experts in various fields. Nassim Nicholas Taleb compared the influence of Kahneman’s work to that of seminal works by Adam Smith and Sigmund Freud, highlighting its transformative nature in reshaping economic theory.
Through his pioneering research, Kahneman reshaped the landscape of economics, turning it into a true behavioral science rather than a purely mathematical exercise. His legacy will endure as future generations continue to explore the complexities of human decision-making.
A full obituary will be released soon.
Robert D. Hershey Jr., a respected journalist who covered finance and economics for The New York Times, passed away in January. Alex Traub contributed to this report.
News
Is now the right time to invest in gold as prices have cooled?
The price of gold has climbed to record highs recently and has remained strong through much of April. And, that growth continued until the precious metal traded at around $2,390 per ounce on April 19, 2024. But since, growth in the price of the precious metal has cooled, with gold’s price now hovering around $2,300 per ounce.
This lull in gold’s price may represent an investment opportunity.
In general, investing is centered around buying assets when prices are low and selling them when prices are high – generating a profit on the difference between the two. So, considering the declines in gold’s price over the past few days, now may be the time to make your investment. But is buying gold during this lull in prices really a good idea?
Compare your gold investment options among leading brokers now.
Gold prices have cooled. Should you buy in now?
With gold’s price down from recent highs, you may be wondering if now is the right time to buy in. There are several reasons the dip in gold’s price may represent an opportunity to buy. Here are some of the biggest:
Prices may rise again
If looking at a gold price chart shows anything for certain, it shows that changes in the overall growth of the medal come in fits and spurts. Periods of price growth are typically followed by periods of declines and vice versa.
But with inflation rising in recent months – and with gold’s reputation as a safe-haven asset that can hedge against inflation – it only makes sense that the price of the precious metal will eventually start to head up again in the future. While attempting to time that directional change may be tricky, buying the precious metal while the price is down gives you the opportunity to take advantage of any upward movement that may be ahead.
Add gold to your portfolio now before prices have a chance to rise.
You may be able to make a quick profit
Gold isn’t known as an asset in which you can earn a quick return, but in today’s market, that may be the case. Don’t forget that in January, gold was trading at just $2,000 per ounce. And, by mid-April, the commodity’s price had climbed to around $2,400 per ounce. That’s about 20% growth in a matter of months, much of which happened since March 1 – an impressive climb for any investment asset.
Perhaps more importantly, gold’s price growth through the beginning of 2024 shows that the commodity doesn’t have to be a buy and hold style investment that you keep in a safety deposit box or precious metal depository for years to come. There’s also the possibility that the commodity’s price could climb further ahead, making it a compelling way to potentially generate a quick profit.
There are other benefits of investing in gold
There are other benefits of investing in gold that have little to do with the price growth seen thus far in 2024 – or the lull in prices seen over the past couple of days. Those benefits include:
- Inflation protection: Gold has long been considered an inflation hedge, and for good reason. When inflation drives the prices of consumer goods and services up – and the value of the dollar down – gold’s price tends to rise. So, it could be used to maintain the value of your portfolio during inflationary economic conditions. That’s important in today’s economic environment as stubborn inflation continues to weigh on the value of the dollar.
- Portfolio diversification: Gold’s price doesn’t always move in the same pattern that bonds or stocks do. So, mixing a reasonable amount of gold into your portfolio (up to 10% of your portfolio assets) as a diversifier could protect you from losses should one or more of your traditional portfolio assets fall in value. “If you have less than 5% – 10% of your net worth in commodities & FX (forex), you should absolutely consider adding exposure to gold and other precious metals,” says Vijay Marolia, money manager and managing partner at the wealth management firm, Regal Point Capital.
The bottom line
Gold’s price has fallen from recent highs – which may represent an opportunity to tap into growth ahead. However, gold isn’t simply a “buy while it’s low and sell while it’s a high” kind of investment opportunity. The commodity can also protect your portfolio from the stubborn inflation we’ve seen thus far in 2024 while acting as a diversification tool that could increase your risk-adjusted portfolio returns. So, consider adding gold to your portfolio today while it has the potential to grow in value.
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