Why do so many investors stick with strategies that feel right, even when the evidence says otherwise? In this episode of Adviser Talk, Tim and Nick use Plato’s allegory of the cave to explain why chasing hot funds, star managers, and market timing is so hard to let go of. They unpack the latest New Zealand SPIVA data, explore how psychology and media keep investors stuck in the shadows, and explain what stepping into the light really looks like in practice.
(00:00:22) Why investors trust familiar stories over evidence and data
(00:01:38) Why this topic matters and why history is relevant
(00:02:07) Plato’s cave explained and how it maps to investor behaviour
(00:05:10) What SPIVA is and what the New Zealand data really shows
(00:06:44) Active vs passive in NZ markets, home turf still underperforms
(00:08:40) Human nature, pattern seeking and why investors believe they can win
(00:09:46) Why trying to beat the market is not investing
(00:10:09) Media influence, clickbait and fear driven financial decisions
(00:11:52) What to look for in a financial adviser, fiduciary duty and independence
(00:13:23) Investing is about behaviour, not intelligence
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