Investor Behavior: The Psychology Of Financial Planning And Investing

Investor Behavior will provide readers with a comprehensive understanding and the latest research in the area of behavior finance and investor decision making. Blending contributions from both scholars and practitioners, the book will provide investment professionals with insights on how to understand and manage client behavior; a framework for interpreting financial market activity; and a in-depth understanding of this important new field of investment research. The book will cover the major principles of behavioral finance, including heuristics, bounded rationality, regret theory, mental accounting, framing, prospect theory, and loss aversion behavior. Specific sections of the book will delve into the role of personality traits, cultural factors, and emotional well-being in investment decisions. Other topics covered include risk perception and tolerance; asset allocation decisions under inertia and inattention bias; behavioral portfolio theory, gambling behavior, and neuro-finance. Contributions will delve into the behavioral underpinnings of various trading and investment strategies, including value investing, contrarian investing, and earnings surprises. The final chapters of the book examine new research on ethical investing, socially responsible investing from a behavioral perspective. Empirical evidence and current literature about each type of investment issue are featured. Cited research studies are presented in a straightforward manner focusing on the comprehension of study findings, rather than on the details of mathematical frameworks.

H. Kent Baker is University Professor of Finance and Kogod Research Professor at the Kogod School of Business, American University. He has served on several boards of directors and advisory councils including the Eastern Finance Association and Southern Finance Association, where he is currently the Vice President – Program and President elect.

Victor Ricciardi is a leading expert on the academic literature and emerging research issues in behavioral finance. He is an Assistant Professor of Financial Management at Goucher College. the Coordinator of Behavioral and Experimental Research at the Social Science Research Network (SSRN) at www.ssrn.com, an editor for several SSRN eJournals in the topic areas of behavioral finance, financial history, behavioral economics, accounting history, behavioral accounting, game theory, and decision making under risk and uncertainty.