“What is investor behavior? The field of investor behavior attempts to understand and explain investor decisions by combining psychology and investing on a micro level—the decision process of individuals and groups—and a macro perspective—the role of financial markets. The decision-making process incorporates both quantitative, objective factors and qualitative, subjective factors based on the features of the investment product or financial service.
Investor behavior examines the cognitive processes and emotional issues that individuals, financial experts, and traders reveal during financial planning and investment management. In practice, individuals make judgments and decisions based on past events, personal beliefs, and preferences.”
This is an excerpt from a book I highly recommend by Victor Ricciardi. Click below for the free 24-page PDF summary, Investor Behavior: The Psychology of Financial Planning and Investing.
Foundations of Investor Behavior
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