Why do smart people make stupid financial choices—and how can they avoid repeating them? Having a head for investing, it turns out, isn't about doing arithmetic on napkins or studying spreadsheets. In fact, a key requirement is modesty and self-awareness, says Money magazine senior writer Jason Zweig, author of “Your Money & Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich” (Simon & Schuster. $26). Zweig endured a series of MRIs to see for himself how the brain responds to financial challenges, and he culled insight from the growing field of neuroeconomics, which studies the biochemistry of our financial behavior. NEWSWEEK's Temma Ehrenfeld spoke to the author about the perils of our brain-triggered responses, how avid investors are like drug addicts and why women really are better investors. Excerpts:
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