Editor’s Note JANUARY 2018 VOLUME 5, No. 1 Mind Over Matter


trol have been known to psychology for centuries. In the late 19th century and early 20th, the so-called depth psycholo- gists Freud, Jung and Adler made the un- conscious mind (more popularly known as the subconscious mind) the focus of their theories of mind and behaviour. In this century, the neuroscientists joined the discussion, pointing out that their research shows that much of the mind operates independent of our will, some- times — or most of the time — making us act in irrational ways that are contrary to our desires and interests. Economists, on the other hand, seem to have been out of step with all this and have theorized as if humans are perfectly rational; 20th-century neoclassical economic theory is especially based on axioms that state baldly that “rational economic man maximizes his utility.” Of course this has come under severe criticism and recently economists have started to take a hard look at real human behaviour rather than their purportedly scientific theories. Today, we have behavioural economics that looks at the irrational things many humans persistently do, such as buying high and selling low. In this special issue on financial planning, two of our features tackle the irrational


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actions that we exhibit with money and investing. In “Battling Investment Bias” (p. 28), former managing editor Tamar Satov takes a look at the work of the be- havioural economists as they examine how real people behave in financial planning. She shows how people can turn the irrational biases they have into positive results. She quotes University of Chicago behavioural economist and 2017 Nobel laureate Richard Thaler, who was “among the first to observe and study such behavioural phe- nomena”: “If we are going to have useful theories about how typical people shop, save for retirement, search for a job or cook dinner, those theories had better not assume that people behave as if they were experts.” This is a story that will challenge your expectations as well as delight and inform you. In “Windfall” (p. 44), writer Yan Barcelo gets expert advice on what to do in the event


of a financial windfall. Here, again, no matter how rational you think you are, if $2 million drops into your lap either from a house sale, unexpected inheritance or some- thing else, your brain will short-circuit, at least in the short term. This feature looks at how to handle such good fortune and come out the other side of euphoria with performing investments. Three other stories complete the mix: there’s one on cryptocurrencies, another on


controversial issues that parents and their children need to know — e.g., does my stepmom, to whom my father leſt his estate, owe me anything? — and a feature about useful financial apps. Yes, there’s one for that.


Okey Chigbo editor-in-chief


2 | CPA MAGAZINE | JANUARY 2018


HE EXISTENCE of subterranean brain/mind processes that oper- ate outside our conscious con-


EDITOR-IN-CHIEF Okey Chigbo DEPUTY EDITOR Bernadette Kuncevicius ASSOCIATE EDITOR Yvette Trancoso ASSOCIATE FRENCH EDITOR Mathieu de Lajartre EDITOR, DIGITAL EDITIONS Margaret Craig-Bourdin MAGAZINE WEB PRODUCER Alan Vintar


ART DIRECTOR Bernadette Gillen ASSOCIATE ART DIRECTOR Kevin Pudsey


EDITORIAL ASSISTANT Harriet Bruser DIRECTOR, LANGUAGE SERVICES Jane Finlayson EDITOR, PROFESSIONAL MATTERS Anya Levykh CONTRIBUTORS Taryn Abate, Yan Barcelo, Mary Teresa Bitti, Dwayne Bragonier, Steve Brearton, Peter Carter, David Descôteaux, John Lorinc, Cathy Hutchinson, David Malamed, David Trahair, Lisa van de Geyn, Karen Wensley, Trevor Wilson


PUBLISHER Heather Whyte, MBA, APR


MANAGER OF ADVERTISING SALES Alexandra Garant (416) 204-3397 agarant@cpacanada.ca


QUEBEC ADVERTISING REPRESENTATIVE Serge Gamache (450) 651-4257 sergegamache@videotron.ca


MAGAZINE PRODUCTION AND ADVERTISING COORDINATOR Michael Marks (416) 204-3255


CIRCULATION MANAGER Jennifer Griffiths (416) 204-3366


CPA MAGAZINE EDITORIAL ADVISORY BOARD: Chair: Vinetta Peek, FCPA, FCMA; Fred Clifford, CPA, CA, CPA (Ill.); Debra J. Feltham, FCPA, FCGA; John Redding, CPA, CMA; Andrée Lavigne, CPA, CA; Ashley Kennedy, CPA, CA


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Photo: Paul Orenstein


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