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Financial Decision-making & Investor Behaviour
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Over the past decade, and especially after the recent 2007-2009 and 2011 financial crises, academics and financial practitioners alike have devoted significant resources to trying to identify investment strategies that are successful regardless of wider economic and financial market conditions. Only a small percentage of this vast output has been devoted to an area which we now view as being fundamental to the successful long-term management of wealth – behavioural finance. Behavioural finance uses our knowledge of psychology to improve our understanding of how individual investors make financial decisions, and how these individual decisions cause markets to behave in aggregate. This book provides a thorough introduction of behavioural finance, investor behaviour and financial decision-making including a historical review of some of the most important financial bubbles through history.