In times of deep uncertainty, we are often overwhelmed with information and use mental shortcuts to arrive at snap decisions and judgements. Sometimes, such assumptions work, but this approach can also lead to biases, errors and confusion, especially when it comes to investment decisions. A year of indecision Under ordinary circumstances, the world has time to catch its breath between major news events. The sheer speed at which history happened during 2011, though, created deep market uncertainty, from Japan’s earthquake cum tsunami to a tragic nuclear disaster, from war in Libya to escalating political turmoil across the Middle East and North Africa, from limited concern over weaker Eurozone members to widespread fears of single currency break-up. Not since the Second World War have investors had to navigate such a barrage of events. Many fell into a trap that rendered their rational capacities useless, with financial markets driven instead by fear,
