Practical analysis for investment professionals

Behavioral Finance


Book Review: Behavioral Investment Management

Little has been done to improve the overall state of investment management on the basis of our growing knowledge of behavioral finance. This book is an attempt to address this void in a unified investment management framework based on portfolio optimization with a behavioral component that uses advances in utility theory.

Take 15: A New Take on Behavioral Finance

Greg B. Davies discusses his new book "Behavioral Investment Management: An Efficient Alternative to Modern Portfolio Theory" and explains the concept of “behavioralizing finance” and the implications for the wealth management industry.

Measuring Investor Overcrowding

Are institutional investors mostly investing in the same securities at the same time? And can a better understanding of such crowding help investors?

With the recent news that Apple, Inc…. READ MORE ›

The Challenges of Multi-Generational Wealth Management in Asia

Burgeoning wealth in the region has created new challenges for Asian families contemplating succession plans. Two Asia Pacific Investment Conference speakers, Barbara Hauser and Christian Stewart, will examine these issues in detail.

Bankable Insights: Eight Lessons from Neuroeconomics for Money Managers

Unlike many behavioral finance pieces which simply contain behavioral admonitions, “Eight Lessons” actually contains prescriptions for overcoming common errors of judgment.

Leadership Lesson for the Eurozone: The Rule of Small Groups

Physical limitations in humans seem to limit our ability to make effective group decisions when the number of the group exceeds seven members. This has important implications for boards of directors, investment committees, and transnational economic organizations, such as the eurozone.

Lie Detection: How Can Financial Analysts Improve Their Ability to Discern the Truth?

Effective financial decision making relies on a proper assessment of the truthfulness of facts. Yet, most people, even professionals, are terrible at spotting lies. Why?

Deploying Financial Emotional Intelligence

Emotions can influence financial decisions in surprisingly predictable ways. We tend to be overconfident in our own knowledge and decisions, we extrapolate recent trends while dismissing the past, we refuse to accept losses gracefully by hanging on to our… READ MORE ›

Daniel Kahneman: Financial Advisers Aren’t Immune from the “Illusion of Skill”

A few weeks ago, Daniel Kahneman, the Nobel prize-winning psychologist and pioneer of behavioral economics, wrote a fascinating article in The New York Times Magazine that examines the illusion of skill as it… READ MORE ›

Research in Emotional Finance Suggests That Trying to Beat the Market Causes Emotional Conflict and Instability

Do your investment decisions involve emotions?

You may be inclined to think not, but according to Professor David Tuckett, a psychoanalyst at University College London, emotions are part and parcel of investment decisions.

A researcher in emotional finance,… READ MORE ›



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