Description
The Psychology of Investing is the first text of its kind to delve into the fascinating subject of how psychology affects investing. Its unique coverage describes how investors actually behave, the reasons and causes of that behavior, why the behavior hurts their wealth, and what they can do about it. Traditional finance has focused on developing the tools which investors can use to optimize expected return and risk-understanding the psychology of investing will complement the material covered in traditional investments text.
Learning Objectives
As a result of studying the text, you should be able to meet the following learning objectives:
• Define prospect theory.
• Recognize how overconfidence is a detriment to investing.
• Define regret of omission.
• Define disposition effect.
• Recognize how risk perceptions play a role in investment strategy.
• Associate how individuals make investment decisions.
• Recognize how emotions effect perceptions of money.
• Recognize how psychological tendencies can effect investment goals.
• Define representativeness error.
• Recognize how biases effect investors’ decisions.
• Define the role social interaction plays in investing.
• Recognize the ways in which emotions influence investor behavior.
• Recognize how self-control effects investor behavior.