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AS pubs open, so too do the questions at the bar of ‘what do you think of this financial opportunity?’

Most recently, the tail end of cryptocurrency investors have been arriving and the lack of financial knowledge, or life experience with those investors, is quite worrying.

Most bubbles grab the least financially sophisticated right at the end, bringing them down with the ship.

There are many conversations I’ve heard at the bar regarding investment A or B, only for the conversation to end when the facts are checked.

There are many who boast of successes but when challenged they have no answer. I often ask: “What did your accountant think of those gains on crypto or whatever the opportunity they saw.”

Invariably they neither had an accountant, or the gain in the first place, and questioning for detail on price timings normally means they scoot to the toilet and body swerve on return.

I have yet to have a conversation with anyone who boasted about how much they had lost! They don’t talk about it.

This feeds right into FOMO (fear of missing out), but, it is really very important in decision making in terms of either making a bad decision or missing out on making a good one.

The book, ‘Thinking Fast and Slow’, has many great points that any would-be investor should consider before investing.

Understand what you might be investing into. Ask for the risk and reward to be explained to you and then test it.

Then, run it by others who will similarly test you on your understanding of it. If you can’t articulate it, don’t be afraid of missing out. In the long run, you won’t.

There are many cognitive biases which allow us to be sucked in or alternatively ignore an obvious opportunity.

We have beliefs and we believe them. We then look for data which proves those beliefs, both positively or negatively, and are blinded to the truth. Referendums prove that either way.

Cognitively we are drawn to more bizarre, way-out things whereas run of the mill, non-crazy things just don’t stick out.

Perhaps the greatest risk, however, is that of projecting our current mindset and all its assumptions into the future.

If we are negative about the world, there’s no point in investing for five years from now and vice versa.

Neither are correct.

At the tender age of 16, I just wanted to play sport. The thought of sitting indoors learning sections of William Shakespeare was beyond traumatising.

He had a great point though: “There is nothing either good or bad, but thinking makes it so”.

Complex, ambiguous choices are generally where the opportunity lies, but these are ignored for simple choices.

If you receive a nice online offer, remember con artists do not come with a business card and they aren’t regulated by the ‘con artist regulatory authority’. Also remember, good con artists are successful for a reason.

For every winner in a transaction there has to be a loser. Think about whether you want that to be you or not.

Selling a share or a car for more than it’s worth, means there is a buyer losing out and vice versa.

Do not get anchored to a previous price. That is nothing to do with where that price is going.

I remember a Far Eastern fund which fell 90 per cent three times on the trot.

Many think if it’s down 90 per cent it can’t go any further and strangely we are of the belief that it only has another 10 per cent to go.

Not so. In 2000, I fully realised ‘what can get cheap, can get a whole lot cheaper’.

Just because a previous price was higher, doesn’t mean you are getting a discount. Markets are pretty efficient, and price themselves ahead, so ask why you might know more than the market.

Finally, cognitively, we all edit and reinforce memories after the fact.

As the song ‘wear sunscreen’ says: “Don’t congratulate yourself or berate yourself either, your choices are half chance, so are everyone elses.”

But do take advice when opportunity presents.

Peter McGahan is chief executive of independent financial adviser Worldwide Financial Planning, which is authorised and regulated by the Financial Conduct Authority. For a complementary conversation regarding inheritance tax, phone Darren McKeever on 023 8064 9674, email info@wwfp.net or visit www.wwfp.net