Beyond Fear and Greed: Behavioral Finance and Interpretation of Investment Psychology

Author: Hersh Shefrin (USA) / Chief Editor: He Xuehui
Publisher:
Publish Date: 2005-04-01
Features: This fresh and groundbreaking book awakens us all to how little we know about financial markets and how much more there is to explore. I particularly appreciate the "Emperor's New Clothes" analogy mentioned in the book regarding the mutual fund industry. Shefrin's reaffirmation of the unreliability of professional investors will make even the most sensitive investors reconsider the advantages of market indexation strategies. — John Bogle, Founder and Senior Chairman of Vanguard, Author of The Common Sense of Mutual Funds
Behavioral finance is the study of normal people and the markets that drive them mad. Shefrin's insights into these people and markets will provide many solutions to financial problems—when you finish reading this book, you will find that you have been thinking about it long after you close it. — Mayer Sterman, Professor of Finance at the Leavey School of Business, Santa Clara University
The Psychology of Money challenges the fundamental assumptions you hold in investing and reveals the psychological traps that may prevent you from achieving higher returns in your portfolio. — Martin Fridson, Managing Director at Merrill Lynch, Author of How to Get Rich
Shefrin integrates research and observation on human behavior and financial anomalies into a broader and deeper perspective on financial markets. No other book so beautifully demonstrates the fundamentals of behavioral finance. — Robert Shiller, Sterling Professor of Economics and Finance at the Yale University Cowles Foundation for Research in Economics
The Psychology of Money is a truly comprehensive behavioral finance book written for practitioners. It should be required reading for asset managers and traders. — Vanguard's Van Harko, Chairman and Chief Information Officer, Strategy Consultant
Most books about financial markets ignore the human element—a serious oversight, as people are just as important on Wall Street as they are on Main Street. The Psychology of Money is an excellent review of the emerging field of behavioral finance. I recommend this book to everyone who wants to trade with others. — Richard Thaler, Professor of Business Administration and Economics at the University of Chicago's Graduate School of Business
Even the best investors on Wall Street can make mistakes. No matter how smart or experienced, all financial professionals will eventually let biases, overconfidence, and emotions affect their judgment and disrupt their behavior. However, most financial decision models fail to reflect these fundamental aspects of human behavior. In The Psychology of Money, the authoritative guide to the factors that actually influence decision-making, Hersh Shefrin uses new psychological research to help us understand the human behavior that affects stock selection, financial services, and corporate financial decisions.
Shefrin believes that financial professionals must understand and embrace behavioral finance—the application of psychology to financial behavior—to avoid many investment traps caused by human error. Through vivid and often humorous real-world examples, Shefrin highlights the common and costly mistakes made by money managers, securities analysts, investment bankers, and corporate leaders, providing readers with valuable insights into their own financial decisions, as well as those of their employees, asset managers, and consultants.
According to Shefrin, the financial industry dangerously ignores psychological factors in investing. The Psychology of Money explains behavioral finance to today's investors. This will help professionals recognize—and avoid—biases and errors in their decisions and refine and improve their overall investment strategies.