{"product_id":"behavioral-finance-and-your-portfolio-isbn-9781119801610","title":"Behavioral Finance and Your Portfolio","description":"\u003cp\u003e\u003cb\u003eBecome a more strategic and successful investor by identifying the biases impacting your decision making.\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIn \u003ci\u003eBehavioral Finance and Your Portfolio\u003c\/i\u003e, acclaimed investment advisor and author Michael M. Pompian delivers an insightful and thorough guide to countering the negative effect of cognitive and behavioral biases on your financial decisions. You’ll learn about the “Big Five” behavioral biases and how they’re reducing your returns and leading to unwanted and unnecessary costs in your portfolio.\u003c\/p\u003e \u003cp\u003eDesigned for investors who are serious about maximizing their gains, in this book you’ll discover how to:\u003c\/p\u003e \u003cp\u003e● Take control of your decision-making—even when challenging markets push greed and fear to intolerable levels\u003c\/p\u003e \u003cp\u003e● Reflect on how to make investment decisions using data-backed and substantiated information instead of emotion and bias\u003c\/p\u003e \u003cp\u003e● Counter deep-seated biases like loss aversion, hindsight and overconfidence with self-awareness and hard facts\u003c\/p\u003e \u003cp\u003e● Identify your personal investment psychology profile, which you can use  to inform your future financial decision making\u003c\/p\u003e \u003cp\u003e\u003ci\u003eBehavioral Finance and Your Portfolio\u003c\/i\u003e was created for individual investors, but will also earn a place in the libraries of financial advisors, planners and portfolio managers who are determined to counteract the less principled and data-driven aspects of their decision making.\u003c\/p\u003e \u003cp\u003ePreface xv\u003c\/p\u003e \u003cp\u003eAcknowledgments xxi\u003c\/p\u003e \u003cp\u003eAbout the Author xxiii\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart I Introduction To Behavioral Finance 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1: What is Behavioral Finance and Why Does It Matter? 3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhy Behavioral Finance Matters 5\u003c\/p\u003e \u003cp\u003eBehavioral Finance: The Big Picture 6\u003c\/p\u003e \u003cp\u003eStandard Finance versus Behavioral Finance 15\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2: Introduction to Behavioral Biases 23\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIntroduction 23\u003c\/p\u003e \u003cp\u003eBehavioral Biases Defined 24\u003c\/p\u003e \u003cp\u003eWhy Understanding and Identifying Behavioral Biases is Crucial 25\u003c\/p\u003e \u003cp\u003eCategorization of Behavioral Biases 27\u003c\/p\u003e \u003cp\u003eDifferences between Cognitive and Emotional Biases 27\u003c\/p\u003e \u003cp\u003eDifference among Cognitive Biases 28\u003c\/p\u003e \u003cp\u003eEmotional Biases 29\u003c\/p\u003e \u003cp\u003eA Final Word on Biases 31\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart II Belief Perseverance Biases Defined and Illustrated 33\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3: Belief Perseverance Bias #1: Cognitive Dissonance Bias 35\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 35\u003c\/p\u003e \u003cp\u003eAm I Subject to Cognitive Dissonance Bias? 38\u003c\/p\u003e \u003cp\u003eInvestment Advice 39\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4: Belief Perseverance Bias #2: Conservatism Bias 41\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 41\u003c\/p\u003e \u003cp\u003eAm I Subject to Conservatism Bias? 44\u003c\/p\u003e \u003cp\u003eInvestment Advice 45\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5: Belief Perseverance Bias #3: Confirmation Bias 47\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 47\u003c\/p\u003e \u003cp\u003eAm I Subject to Confirmation Bias? 51\u003c\/p\u003e \u003cp\u003eInvestment Advice 52\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6: Belief Perseverance Bias #4: Representativeness Bias 55\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 55\u003c\/p\u003e \u003cp\u003eExamples of Representativeness Bias 56\u003c\/p\u003e \u003cp\u003eAm I Subject to Representativeness Bias? 60\u003c\/p\u003e \u003cp\u003eInvestment Advice 62\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7: Belief Perseverance Bias #5: Illusion-of-Control Bias 65\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 65\u003c\/p\u003e \u003cp\u003eExample of Illusion of Control Bias 66\u003c\/p\u003e \u003cp\u003eAm I Subject to Illusion of Control Bias? 69\u003c\/p\u003e \u003cp\u003eInvestment Advice 70\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8: Belief Perseverance Bias #6: Hindsight Bias 73\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 73\u003c\/p\u003e \u003cp\u003eExample of Hindsight Bias 74\u003c\/p\u003e \u003cp\u003eAm I Subject to Hindsight Bias? 76\u003c\/p\u003e \u003cp\u003eInvestment Advice 77\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart III: Information Processing Biases Defined and Illustrated 79\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9: Information Processing Bias #1: Mental Accounting Bias 81\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 81\u003c\/p\u003e \u003cp\u003ePractical Application 83\u003c\/p\u003e \u003cp\u003eAm I Subject to Mental Accounting Bias? 85\u003c\/p\u003e \u003cp\u003eInvestment Advice 88\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10: Information Processing Bias #2: Anchoring Bias 91\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 91\u003c\/p\u003e \u003cp\u003eExample of Anchoring and Bias 92\u003c\/p\u003e \u003cp\u003eAm I Subject to Anchoring Bias? 94\u003c\/p\u003e \u003cp\u003eInvestment Advice 95\u003c\/p\u003e \u003cp\u003eBonus Discussion: Investment Strategies That Leverage Anchoring Bias 96\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11: Information Processing Bias #3: Framing Bias 99\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 99\u003c\/p\u003e \u003cp\u003eExample of Framing Bias 101\u003c\/p\u003e \u003cp\u003eAm I Subject to Framing Bias? 105\u003c\/p\u003e \u003cp\u003eInvestment Advice 107\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12: Information Processing Bias #4: Availability Bias 109\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 109\u003c\/p\u003e \u003cp\u003eExample of Availability Bias 110\u003c\/p\u003e \u003cp\u003eAm I Subject to Availability Bias? 113\u003c\/p\u003e \u003cp\u003eInvestment Advice 114\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13: Information Processing Bias #5: Self-Attribution Bias 117\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 117\u003c\/p\u003e \u003cp\u003eExample of Self-Attribution Bias 118\u003c\/p\u003e \u003cp\u003eAm I Subject to Self-Attribution Bias? 119\u003c\/p\u003e \u003cp\u003eInvestment Advice 121\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14: Information Processing Bias #6: Outcome Bias 123\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 123\u003c\/p\u003e \u003cp\u003eAm I Subject to Recency Bias? 125\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15: Information Processing Bias #7: Recency Bias 129\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 129\u003c\/p\u003e \u003cp\u003eExample of Recency Bias 130\u003c\/p\u003e \u003cp\u003eAm I Subject to Recency Bias? 134\u003c\/p\u003e \u003cp\u003eInvestment Advice 135\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart IV: Emotional Biases Defined and Illustrated 137\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16: Emotional Bias #1: Loss Aversion Bias 139\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 139\u003c\/p\u003e \u003cp\u003eExample of Loss Aversion Bias 140\u003c\/p\u003e \u003cp\u003eAm I Subject to Loss Aversion Bias? 142\u003c\/p\u003e \u003cp\u003eInvestment Advice 144\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 17: Emotional Bias #2: Overconfidence Bias 145\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 145\u003c\/p\u003e \u003cp\u003eExamples of Overconfidence Bias 146\u003c\/p\u003e \u003cp\u003eAm I Subject to Overconfidence Bias? 148\u003c\/p\u003e \u003cp\u003eInvestment Advice 151\u003c\/p\u003e \u003cp\u003eA Final Word on Overconfidence 153\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 18: Emotional Bias #3: Self-Control Bias 155\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 155\u003c\/p\u003e \u003cp\u003eExample of Self-Control Bias 156\u003c\/p\u003e \u003cp\u003eAm I Subject to Self-Control Bias? 159\u003c\/p\u003e \u003cp\u003eInvestment Advice 160\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 19: Emotional Bias #4: Status Quo Bias 163\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 163\u003c\/p\u003e \u003cp\u003eExample of Status Quo Bias 164\u003c\/p\u003e \u003cp\u003eAm I Subject to Status Quo Bias? 165\u003c\/p\u003e \u003cp\u003eInvestment Advice 167\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 20: Emotional Bias #5: Endowment Bias 169\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 169\u003c\/p\u003e \u003cp\u003eExample of Endowment Bias 170\u003c\/p\u003e \u003cp\u003eAm I Subject to Endowment Bias? 172\u003c\/p\u003e \u003cp\u003eInvestment Advice 173\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 21: Emotional Bias #6: Regret Aversion Bias 175\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 175\u003c\/p\u003e \u003cp\u003eExample of Regret Bias 176\u003c\/p\u003e \u003cp\u003eAm I Subject to Regret Bias? 179\u003c\/p\u003e \u003cp\u003eAdvice 180\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 22: Emotional Bias #7: Affinity Bias 183\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBias Description 183\u003c\/p\u003e \u003cp\u003eExample of Affinity Bias 184\u003c\/p\u003e \u003cp\u003eAm I Subject to Affinity Bias? 186\u003c\/p\u003e \u003cp\u003eInvestment Advice 188\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart V: Behavioral Investor Types 189\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 23: Staying on Target to Reach Financial Goals is Hard 191\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eNon-Financial Examples of\u003c\/p\u003e \u003cp\u003eSelf-Defeating Behavior 192\u003c\/p\u003e \u003cp\u003eFinancial Examples of Self-Defeating Behavior 196\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 24: Introduction to Behavioral Investor Types 201\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIntroduction 201\u003c\/p\u003e \u003cp\u003eWhat is My Behavioral Investor Type? 204\u003c\/p\u003e \u003cp\u003eStep 1: BIT Orientation Quiz 205\u003c\/p\u003e \u003cp\u003eStep 2: Bias Identification Quiz 210\u003c\/p\u003e \u003cp\u003eStep 3: Advice for Each BIT 216\u003c\/p\u003e \u003cp\u003eSummary 216\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 25: Preserver Behavioral Investor Type 217\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eUpside\/Downside Analysis 219\u003c\/p\u003e \u003cp\u003eBias Analysis of Preservers 220\u003c\/p\u003e \u003cp\u003eAdvice for Preservers 224\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 26: Follower Behavioral Investor Type 225\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eUpside\/Downside Analysis 227\u003c\/p\u003e \u003cp\u003eBias Analysis of Followers 228\u003c\/p\u003e \u003cp\u003eOther Important Follower Biases: Hindsight, Cognitive Dissonance and Regret 232\u003c\/p\u003e \u003cp\u003eAdvice for Followers 233\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 27: Independent Behavioral Investor Type 235\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eUpside\/Downside Analysis 237\u003c\/p\u003e \u003cp\u003eBias Analysis of Independents 238\u003c\/p\u003e \u003cp\u003eSelf-Attribution 240\u003c\/p\u003e \u003cp\u003eConservatism Bias 241\u003c\/p\u003e \u003cp\u003eRepresentative Bias 242\u003c\/p\u003e \u003cp\u003eAdvice for Independents 242\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 28: Accumulator Behavioral Investor Type 243\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eUpside\/Downside Analysis 245\u003c\/p\u003e \u003cp\u003eAccumulator Bias Analysis 246\u003c\/p\u003e \u003cp\u003eAdvice for Accumulators 251\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 29: Asset Allocation Case Studies for Each Behavioral Investor Type 253\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart VI: Behavioral Aspects of Portfolio Implementation 271\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 30: Behavioral Finance Aspects of the Active versus Passive Debate 273\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Logic of Passive Management 274\u003c\/p\u003e \u003cp\u003eThe Potential Benefits of Active Management 274\u003c\/p\u003e \u003cp\u003eAdvice: Use the Best Practical Allocation for Your Portfolio 277\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 31: Behaviorally Aware Portfolio Construction 279\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIntroduction 279\u003c\/p\u003e \u003cp\u003eGoals-based Investing 280\u003c\/p\u003e \u003cp\u003eConsolidating Accounts into a Portfolio View 281\u003c\/p\u003e \u003cp\u003ePortfolio Approach 282\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 32: Behavioral Finance and Market Corrections 285\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Most Recent Panic 286\u003c\/p\u003e \u003cp\u003eIndex 291\u003c\/p\u003e \u003cp\u003e\u003cb\u003eMICHAEL M. POMPIAN\u003c\/b\u003e is Founder and Chief Investment Officer of Sunpointe Investments, an investment advisory and wealth management firm based in St. Louis, Missouri. He is the author of five books on finance, including \u003ci\u003eAdvising Ultra-Affluent Clients and Family Offices, Behavioral Finance and Wealth Management\u003c\/i\u003e, and \u003ci\u003eBehavioral Finance and Investor Types\u003c\/i\u003e.\u003c\/p\u003e  \u003cp\u003eCognitive and emotional biases can wreak havoc with investor portfolios. Poor investment decision-making caused by behavioral errors, especially in times of high market volatility, leads to poor financial outcomes—a material problem for both new and experienced investors. Whether you’re mired in loss aversion, suffer from anchoring bias, or you’re sorting your portfolio into various mental accounts, investor biases will prevent you from maximizing your wealth. But you can learn to challenge your own biases and prevent costly investment errors!\u003c\/p\u003e\u003cp\u003eIn \u003ci\u003eBehavioral Finance and Your Portfolio\u003c\/i\u003e, veteran investor and advisor Michael M. Pompian delivers a thorough grounding in the most important investor biases you’re likely to encounter when making crucial investment decisions. Perhaps the most critical insight, knowing the difference between emotional and cognitive biases, will help you understand what makes you tick as an investor. Full of case studies and quizzes, this book will help you identify and diagnose your own biases. You will become a better investor, even as you deal with the stresses of investing in the real world.\u003c\/p\u003e\u003cp\u003eYou’ll learn to take control of your decision-making even when challenging markets can push fear or greed to uncomfortable levels. You’ll also discover how to analyze your options, either alone or alongside your investment advisor, as well as how to make better investment decisions overall—and the benefits of backing up those decisions with hard data.\u003c\/p\u003eRelying on his decades of experience in financial markets as both an investor and advisor, Pompian shows you how to understand your unique behavioral investor type and how to improve decisions based on your individual tendencies. Perfect for individual investors, financial advisors, portfolio managers, and other financial professionals, \u003ci\u003eBehavioral Finance and Your Portfolio\u003c\/i\u003e will earn a place in the library of any conscientious investor hoping to gain perspective on cognitive patterns and biases that may be impairing their ability to achieve the best possible return on their investments.  \u003cp\u003e\u003cb\u003ePRAISE FOR BEHAVIORAL FINANCE AND YOUR PORTFOLIO\u003c\/b\u003e\u003c\/p\u003e\u003cp\u003e“Personality is linked to investors’ cognitive errors, including overconfidence and emotions such as regret. Michael Pompian’s work contributes greatly to our understanding of investor behavior as he exposes these important insights into investor psychology.”\u003cbr\u003e\u003cb\u003e —Meir Statman,\u003c\/b\u003e Glenn Klimek Professor of Finance, Santa Clara University; author, \u003ci\u003eWhat Investors Really Want\u003c\/i\u003e\u003c\/p\u003e\u003cp\u003e“Michael Pompian brings something new to the field of behavioral finance books. By combining insights into our fundamental cognitive and emotional biases and investor personality types, he provides concrete, practical action steps to avoid making big mistakes. In classic Pompian style, he does this with efficient, easy-to-read prose. You do not want to make important financial decisions without reading this book.”\u003cbr\u003e \u003cb\u003e—Stephen Horan,\u003c\/b\u003e Head of Private Wealth, CFA Institute; author, \u003ci\u003eThe New Wealth Management\u003c\/i\u003e\u003c\/p\u003e\u003cp\u003e“Many inefficiencies in the market are a result of how investors let their emotions dictate their investment decisions. Michael Pompian’s work provides a framework to understand why these inefficiencies exist and how they can improve their investment portfolios.”\u003cbr\u003e\u003cb\u003e —Jean L.P. Brunel,\u003c\/b\u003e Editor, \u003ci\u003eThe Journal of Wealth Management\u003c\/i\u003e\u003c\/p\u003e\u003cp\u003e“Michael Pompian is a global authority and thought leader in the field of Behavioral Finance. I have worked closely with Michael for many years in an ultra-high-net-worth client advisory setting, and I have witnessed his application of the behavioral principles that he has developed over a 25-year consulting career. I have seen Michael navigate, adapt to, and mitigate complex behavioral biases while still accomplishing portfolio management risk and return objectives. Read this book!”\u003c\/p\u003e\u003cb\u003e —Wesley Burns, CFA, CFP,\u003c\/b\u003e Senior Family Office Investment Advisor","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47988800389349,"sku":"NP9781119801610","price":25.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781119801610.jpg?v=1761781638","url":"https:\/\/k12savings.com\/es\/products\/behavioral-finance-and-your-portfolio-isbn-9781119801610","provider":"K12savings","version":"1.0","type":"link"}