What do you think?
Rate this book
Investor Behavior: The Psychology of Financial Planning and Investing
WINNER, Personal Finance/Investing, 2015 USA Best Book AwardsFINALIST, Reference, 2015 USA Best Book AwardsInvestor Behavior provides readers with a comprehensive understanding and the latest research in the area of behavioral finance and investor decision making. Blending contributions from noted academics and experienced practitioners, this 30-chapter book will provide investment professionals with insights on how to understand and manage client behavior; a framework for interpreting financial market activity; and an in-depth understanding of this important new field of investment research. The book should also be of interest to academics, investors, and students.The book will cover the major principles of investor psychology, including heuristics, bounded rationality, regret theory, mental accounting, framing, prospect theory, and loss aversion. Specific sections of the book will delve into the role of personality traits, financial therapy, retirement planning, financial coaching, and emotions in investment decisions. Other topics covered include risk perception and tolerance, asset allocation decisions under inertia and inattention bias; evidenced based financial planning, motivation and satisfaction, behavioral investment management, and neurofinance. Contributions will delve into the behavioral underpinnings of various trading and investment topics including trader psychology, stock momentum, earnings surprises, and anomalies. The final chapters of the book examine new research on socially responsible investing, mutual funds, and real estate investing from a behavioral perspective. Empirical evidence and current literature about each type of investment issue are featured. Cited research studies are presented in a straightforward manner focusing on the comprehension of study findings, rather than on the details of mathematical frameworks.
- GenresFinanceNonfiction
640 pages, Kindle Edition
First published September 4, 2012
16 people are currently reading
139 people want to read
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 3 of 3 reviews
July 12, 2015
Understanding investor behavior is essential for long term success in the financial markets. This is why 5 out of the 16 books on the Recommended Reading list of my own book deal exclusively with behavioral finance issues. This book is certainly one of them.
In fact, if I had to choose one single book to have on behavioral finance, it would be this one. Those unfamiliar with the field may want to first read an introductory book, such as Thinking Fast and Slow by Kahneman or Predictably Irrational by Ariely. After that, this is the book you should keep around. The depth and breadth within these 640 pages is impressive.
What I liked best is that the authors include abundant scholarly material while also covering a wide range of ideas that should be useful to practitioners. While the book can be used by students, academics, and investors, the primary beneficiaries may be financial planners and counselors, who should gain a big edge over competitors by using even a few of the thought provoking ideas in this book.
The book begins with an informative timeline of financial history and investment theory with an emphasis on behavioral issues such as the tulip mania of the 1600's, the work of Mackay in 1841 identifying bubbles and panics, George Selden' s identification of behavioral and emotional issues that influence stock market behavior, and the revolutionary development of behavioral finance in the early to mid-1990s.
In the course of this journey, through selected articles of prominent researchers, the authors introduce us to a broad range of interesting topics such as the illusion of control, cognitive biases, risk tolerances and emotion, transpersonal economics, neurofinance, safety-first portfolio theory, behavioral asset pricing models, the psychology of trading, household investment decisions, improving medical and financial outcomes, and financial therapy, coaching, and counseling.
There is a great need to help investors understand and deal with their behavioral biases. This book should be particularly useful to financial planners who wish to counsel their clients on behaviorally-based issues and apply behavioral principles to determine what is in their clients' best interests. I highly recommend this book.
In fact, if I had to choose one single book to have on behavioral finance, it would be this one. Those unfamiliar with the field may want to first read an introductory book, such as Thinking Fast and Slow by Kahneman or Predictably Irrational by Ariely. After that, this is the book you should keep around. The depth and breadth within these 640 pages is impressive.
What I liked best is that the authors include abundant scholarly material while also covering a wide range of ideas that should be useful to practitioners. While the book can be used by students, academics, and investors, the primary beneficiaries may be financial planners and counselors, who should gain a big edge over competitors by using even a few of the thought provoking ideas in this book.
The book begins with an informative timeline of financial history and investment theory with an emphasis on behavioral issues such as the tulip mania of the 1600's, the work of Mackay in 1841 identifying bubbles and panics, George Selden' s identification of behavioral and emotional issues that influence stock market behavior, and the revolutionary development of behavioral finance in the early to mid-1990s.
In the course of this journey, through selected articles of prominent researchers, the authors introduce us to a broad range of interesting topics such as the illusion of control, cognitive biases, risk tolerances and emotion, transpersonal economics, neurofinance, safety-first portfolio theory, behavioral asset pricing models, the psychology of trading, household investment decisions, improving medical and financial outcomes, and financial therapy, coaching, and counseling.
There is a great need to help investors understand and deal with their behavioral biases. This book should be particularly useful to financial planners who wish to counsel their clients on behaviorally-based issues and apply behavioral principles to determine what is in their clients' best interests. I highly recommend this book.
January 2, 2018
A nice collection of academic essays on investor psychology.
January 2, 2019
A decent review book of the current status of our understanding. But there hasn't been anything substantial added since the 1990s, apart from a better understanding of the neuroscience and evolutionary psychology as it pertains to investor behaviour.
Buy it to add to your reference collection.
Buy it to add to your reference collection.
Displaying 1 - 3 of 3 reviews