Behavioural Investing
Understanding The Psychology of Investing
by
Book Cover & Preview Text
Let’s ask ourselves did we buy stock at the time when everyone seems to make money in the stock market and we feel we should do the same? Did we buy simply because the stock has fallen to its year low and assume it will rebound in near term? These are common investors’ mistakes that have been repeated over and over again. How do we avoid those mistakes as an investor? Does that mean we can’t make money from the stock market?
Formats
Book Details
About the Book
What drives investor behaviour? We would all like to think we always behave rationally but in reality we are often swayed by emotions. Most financial theories are based on the idea that everyone takes careful account of all available information before making investment decisions. However, researchers have uncovered a surprisingly large amount of evidence that this is not the case. Dozens of examples of irrational behaviour and repeated errors in judgement have been documented in academic studies. This book gives plenty of examples of investment mistakes, and analyses them from a Behavioural Finance perspective. Behavioural Finance is the study of the influence of psychology on the behaviour of investors and their subsequent effect on the markets. It combines the discipline of psychology and economics to explain why and how people make irrational or illogical decisions when they make investment decisions.