The madness at the end of January around a few now-famous stocks can largely be explained by the fact that all of five conditions for market madness were met.

Finology - behavioural FINance and investor psychOLOGY - knowledge and skills substantially enhance practitioners' ability to communicate with clients and manage portfolios more effectively. This Backgrounder seeks to foster a greater understanding of and interest in finology.

The first generation of behavioural finance described people as "irrational", fooled into cognitive and emotional errors that diminish wealth. The second generation of behavioural finance describes people as "normal" - we use shortcuts and sometimes commit errors on the way to satisfying our wants.

Classical economists often incorporated human behaviour into their thinking. But in the 1960s and 1970s, homo economicus - the great rational agent of economic theory - was born. It was not until the 1990s that the link between human behaviour and economics began to be re-established.

Finology is the interesting and unique mix of behavioural finance ("fin") and investor psychology ("ology") as it relates to giving investment advice to individual investors.

Behavioural finance supplements traditional financial and investment theory. Findings in the field of behavioural finance may help advisers, consultants and clients better manage their thoughts, feelings, and actions when investing.

Beliefs interact with investors' biases and preferences to ultimately influence their behaviour. Two recent papers highlight the impact of individual investors' beliefs about the future and the impact on portfolio behaviour and composition, as well as market returns.

To say a lot has changed since I spoke to you back in February at Markets Summit 2020 is an incredible understatement. Between now and Markets Summit in February 2021, I'm going to be watching three things.

Relatively little is known about what greed is and does. These two papers highlight the importance of greed in economic behaviour, and to a greater chance of engaging in ethically questionable behaviour.

Culture explains much about how we think, feel, and behave. These two papers explore the influence of culture and cultural distance in a financial context.

Understanding what has really changed in people's values as a result of Covid-19 and the influence of emotions will prepare us for the increasingly polarised economic, geopolitical, social and environmental new world order.

These two papers provide a more sophisticated, behavioural understanding of time discounting, to enable more nuanced conversations with clients about current and future consumption, and help mitigate the potentially negative impacts of present bias.

It turns out that 'retiring’ and withdrawing from productive life actually conflicts with our own natural drivers of well-being. The concept of ‘retirement’ is an obsolescent by-product of the industrial era that needs to be retired.

These two research papers present insights into how advisers can better assess and guide how clients think about and structure goals - including savings goals.

Humans categorise and form stories about their world - including their financial lives. Two recent papers emphasise the implications of mental accounting, particularly for any investment professional in a client-facing role.

Regardless of how QSuper justifies their focus on limited advice, they cannot justify calling it advice. It is a product recommendation.

Two research papers exploring regret can help us improve how investment decision-making and outcomes are framed with clients and offer deeper insight into clients' personal and financial goals and priorities.

The Investment Management Research Program is the academic research unit of Portfolio Construction Forum, the specialist, independent provider of portfolio construction continuing education, accreditation and certification services in Australia and NZ. The IMR Program aims to advance investment management research by curating courses, workshops and symposia focused on the spectrum of issues involved in designing and building investment portfolios.

The performance of stock markets during the coronavirus pandemic seems to defy logic - until one considers possible explanations based on crowd psychology.

We make automatic assumptions on a daily basis. A critical assumption is that our pre-crisis investment management toolkit will remain relevant in the future.