Have Behavioral Finance Precepts Improved Your Investment Results?

Subjects: Polls

48.25% of respondents to our unscientific poll indicated that they have not implemented behavioral finance at their investment firms. Although this may seem surprising, a consistent criticism of behavioral finance is its lack of a unifying theory. In other words, although behavioral finance observations of cognitive biases are descriptive, they do not necessarily suggest how to take advantage of these biases or how to avoid them. That said, a majority of respondents (51.75%) stated that they have incorporated behavioral finance tenets at their investment firms. Among this group, 44% reported success in implementation, whereas 7.75% stated that they have not achieved success.

Read more from Jason Voss, CFA, on applications of Behavioral Finance in A Behavioral Bias Cure? and Eight Lessons From Neuroeconomics for Money Managers.

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About the Author(s)

Jason Voss, CFA

Jason Voss, CFA, tirelessly focuses on improving the ability of investors to better serve end clients. He is the author of the Foreword Reviews Business Book of the Year Finalist, The Intuitive Investor and the CEO of Active Investment Management (AIM) Consulting. Voss also sub-contracts for the well known firm, Focus Consulting Group. Previously, he was a portfolio manager at Davis Selected Advisers, L.P., where he co-managed the Davis Appreciation and Income Fund to noteworthy returns. Voss holds a BA in economics and an MBA in finance and accounting from the University of Colorado.

Ethics Statement

My statement of ethics is very simple, really: I treat others as I would like to be treated. In my opinion, all systems of ethics distill to this simple statement. If you believe I have deviated from this standard, I would love to hear from you: [email protected]