Investing Psychology: The Effects of Behavioral Finance on Investment Choice and Bias

Investing Psychology: The Effects of Behavioral Finance on Investment Choice and Bias

by Tim Richards
     
 

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As we move forward into the 21st century, fraught with global economic uncertainties and disruptions, it is more important than ever to understand the fundamental realities of behavioral finance and the inherent human biases that drive so many of our investment decisions. In Investing Psychology: The Effects of Behavioral Finance on Investment

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Overview

As we move forward into the 21st century, fraught with global economic uncertainties and disruptions, it is more important than ever to understand the fundamental realities of behavioral finance and the inherent human biases that drive so many of our investment decisions. In Investing Psychology: The Effects of Behavioral Finance on Investment Choice and Bias, renowned behavioral investment expert and blogger Tim Richards provides a plain-language guide for understanding the perils of the financial world that have evolved around us and teaches us how to defend ourselves against our most dangerous financial enemy – our brain.

Starting with an overview of how the brain perceives realities of the financial world at large and how human nature impacts even our most basic financial decisions, the author walks you through many of the preconceived notions that haunt individual investors and professional financial advisors alike. As humans, we tend to have an overly optimistic belief in our ability to assess risk and opportunity and to make the right decisions when it comes to our financial futures. And, unbeknownst to most of us, we are often being influenced by situational factors in our lives, as well as the pervasive group think of major financial media outlets and corporate marketing campaigns. All of it conspires to push us toward decisions that can have disastrous financial consequences.

The key to overcoming the most common investment pitfalls, according to Tim Richards, is to learn to identify and overcome the fact that our tendency is often to make poor investment decisions because of our innate behavioral bias. When we understand how and why our brains consistently fool us, we gain the power to avoid bias in our decisions and maximize our investment returns.

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Product Details

ISBN-13:
9781118722190
Publisher:
Wiley
Publication date:
04/28/2014
Series:
Wiley Finance Series
Pages:
256
Product dimensions:
9.00(w) x 6.20(h) x 1.00(d)

Meet the Author

TIM RICHARDS is the creator of the Psy-Fi Blog (www.psyfitec.com), a unique website dedicated to analyzing, explaining, and integrating the vast body of research on the impact of psychology in finance. As a uniquely focused resource for behavioral investing, the website attracts as many as 25,000 unique visits a month and is regularly featured in the largest information aggregators and websites in the financial industry.

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