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

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Features: This fresh, rule-breaking book awakens us all to how little we know about financial markets and how much more there is to explore. I particularly appreciate the mention of the "Emperor's New Clothes" in the mutual fund industry. Schiller's reaffirmation of the unreliability of professional investors will lead even the most sensitive investors to 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. Schiller's insights into these people and markets will provide many solutions to your financial problems—as you read this book, believe you will close it long after. — Mayer Sternman, professor of finance at the Leavey School of Business, Santa Clara University
The Psychology of Money challenges the fundamental assumptions you hold about investing and uncovers 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 Become a Millionaire
Schiller integrates his research and observations 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 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 Harklerath, 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 the highway. The Psychology of Money is an excellent review of the emerging field of behavioral finance. I recommend this book to everyone, including those who trade with others. — Richard Thaler, the Robert J. Shiller Professor of Finance and Economics at the University of Chicago’s Graduate School of Business
Even the best investors on Wall Street 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. Yet, 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, Schiller uses the latest psychological research to help us understand the human behavior that affects stock selection, financial services, and corporate financial decisions.
Schiller believes that financial professionals must understand and embrace behavioral finance—the application of psychology to financial behavior—to avoid many investment pitfalls caused by human error. Through vivid, often humorous real-world examples, Schiller 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 Schiller, the financial industry dangerously overlooks investment psychological factors. The Psychology of Money interprets behavioral finance for today’s investors. It will help professionals recognize—and avoid—biases and errors in their decisions and refine and improve their overall investment strategies.