{"product_id":"behavioral-finance-and-investor-types-isbn-9781118011508","title":"Behavioral Finance and Investor Types","description":"\u003cb\u003eAchieve investing success by understanding your behavior type\u003c\/b\u003e  \u003cp\u003eThis groundbreaking book shows how to invest wisely by managing your behavior, and not just your money. Step by step, Michael Pompian (a leading authority in the practical application of Behavioral Finance concepts to wealth management) helps you plan a strategy targeted to your personality. The book includes a test for determining your investment type and offers strategies you can put into use when investing. It also includes a brief history of the stock market, and easy-to-comprehend information about stocks and investing to help you lay a solid foundation for your investment decisions.\u003c\/p\u003e \u003cp\u003e\u003ci\u003eBehavioral Finance and Investor Types\u003c\/i\u003e is divided into two parts. Test Your Type, gives an overview of Behavioral Finance as well as the elements that come into play when figuring out BIT, like active or passive traits, risk tolerance, and biases. The book includes a quiz to help you discover what category you are in. Plan and Act, contains the traits common to your type; an analysis of the biases associated with your type; and strategies and solutions that compliment and capitalize on your BIT.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eOffers a practical guide to an investing strategy that fits both your financial situation and your personality type\u003c\/li\u003e \u003cli\u003eIncludes a test for determining your tolerance for risk and other traits that will determine your investment type\u003c\/li\u003e \u003cli\u003eWritten by the Director of the Private Wealth Practice for Hammond Associates—an investment consulting firm serving institutional and private wealth clients\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003e\u003ci\u003eBehavioral Finance and Investor Types\u003c\/i\u003e offers investors a better sense of what drives them and what puts on their breaks. By using the information found here, you'll quickly become savvy about the world of investing because you'll come to understand your place in it.\u003c\/p\u003e \u003cp\u003eForeword xi\u003c\/p\u003e \u003cp\u003ePreface xiii\u003c\/p\u003e \u003cp\u003eAcknowledgments xxi\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart One Introduction to Behavioral Finance 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 Why Reaching Financial Goals Is Difficult 3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eNonfinancial Examples of Self-Defeating Behavior 4\u003c\/p\u003e \u003cp\u003eFinancial Examples of Self-Defeating Behavior 8\u003c\/p\u003e \u003cp\u003eSummary 11\u003c\/p\u003e \u003cp\u003eNotes 12\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 Overview of Behavioral Finance 13\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBehavioral Finance: Micro versus Macro 14\u003c\/p\u003e \u003cp\u003eStandard Finance versus Behavioral Finance 15\u003c\/p\u003e \u003cp\u003eThe Role of Behavioral Finance with Private Clients 22\u003c\/p\u003e \u003cp\u003ePractical Applications 22\u003c\/p\u003e \u003cp\u003eNotes 24\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 The Building Blocks: Behavioral Biases 25\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCognitive Biases 27\u003c\/p\u003e \u003cp\u003eEmotional Biases 38\u003c\/p\u003e \u003cp\u003eSummary 43\u003c\/p\u003e \u003cp\u003eNotes 44\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Two Personality Theory 45\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Introduction to Personality Theory 47\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eHistory of Personality Theory 48\u003c\/p\u003e \u003cp\u003eFour Main Personality Theories 50\u003c\/p\u003e \u003cp\u003eNotes 65\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 The History of Personality Testing 67\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eTypes of Personality Tests 67\u003c\/p\u003e \u003cp\u003eSummary 77\u003c\/p\u003e \u003cp\u003eNotes 77\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 The Behavioral Investor Type Framework 79\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eReviewing the Original Process 81\u003c\/p\u003e \u003cp\u003eThe Behavioral Alpha Process: A Top-Down Approach 81\u003c\/p\u003e \u003cp\u003eUpdates to the Previous Model 85\u003c\/p\u003e \u003cp\u003eUpdated BIT Theory and Application 87\u003c\/p\u003e \u003cp\u003eSummary 89\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Behavioral Investor Type Diagnostic Testing 91\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStep 1: BIT Orientation Quiz 92\u003c\/p\u003e \u003cp\u003eStep 2: Bias Identification Quiz 94\u003c\/p\u003e \u003cp\u003eSummary 100\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Three Explanation of the Behavioral Investor Types 101\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 The Preserver 103\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eUpside\/Downside Analysis 104\u003c\/p\u003e \u003cp\u003eBias Analysis 105\u003c\/p\u003e \u003cp\u003eOther Biases 107\u003c\/p\u003e \u003cp\u003eAdvice for Preservers 109\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 The Follower 111\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eUpside\/Downside Analysis 112\u003c\/p\u003e \u003cp\u003eBias Analysis 113\u003c\/p\u003e \u003cp\u003eOther Biases 117\u003c\/p\u003e \u003cp\u003eAdvice for Followers 119\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 The Independent 121\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eUpside\/Downside Analysis 122\u003c\/p\u003e \u003cp\u003eBias Analysis 123\u003c\/p\u003e \u003cp\u003eAdvice for Independents 133\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 The Accumulator 135\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eUpside\/Downside Analysis 136\u003c\/p\u003e \u003cp\u003eBias Analysis 137\u003c\/p\u003e \u003cp\u003eOther Biases 141\u003c\/p\u003e \u003cp\u003eAdvice for Accumulators 144\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Four Plan and Act 147\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 Capital Markets and Asset Classes 149\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOverview of Asset Classes 150\u003c\/p\u003e \u003cp\u003ePublicly Traded Equity Investments (Stocks) 154\u003c\/p\u003e \u003cp\u003eFixed Income Investments (Bonds) 163\u003c\/p\u003e \u003cp\u003eHedge Funds 172\u003c\/p\u003e \u003cp\u003eReal Assets 176\u003c\/p\u003e \u003cp\u003eSimple Portfolio Construction 180\u003c\/p\u003e \u003cp\u003eSummary 182\u003c\/p\u003e \u003cp\u003eNotes 182\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13 What Is Asset Allocation? 183\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Importance of Assumptions 185\u003c\/p\u003e \u003cp\u003eThe Importance of Strategic Asset Allocation 186\u003c\/p\u003e \u003cp\u003eConsiderations for Individual Investors 188\u003c\/p\u003e \u003cp\u003eWhy Asset Allocation Is So Important 197\u003c\/p\u003e \u003cp\u003eSummary 200\u003c\/p\u003e \u003cp\u003eNotes 200\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14 Financial Planning: A Crucial Step 201\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Is Financial Planning? 202\u003c\/p\u003e \u003cp\u003eWorking with a Financial Planner 203\u003c\/p\u003e \u003cp\u003eWhat Is a Certified Financial Planner? 205\u003c\/p\u003e \u003cp\u003eWho Can Provide Financial Planning Services? 209\u003c\/p\u003e \u003cp\u003eSummary 212\u003c\/p\u003e \u003cp\u003eNotes 213\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15 Investment Advice for Each Behavioral Investor Type 215\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFoundations of Best Practical Allocation 216\u003c\/p\u003e \u003cp\u003eGuidelines for Determining When to Moderate and When to Adapt 217\u003c\/p\u003e \u003cp\u003eBest Practical Allocation for Preservers 219\u003c\/p\u003e \u003cp\u003eBest Practical Allocation for Followers 222\u003c\/p\u003e \u003cp\u003eBest Practical Allocation for Independents 224\u003c\/p\u003e \u003cp\u003eBest Practical Allocation for Accumulators 227\u003c\/p\u003e \u003cp\u003eSummary 229\u003c\/p\u003e \u003cp\u003eNote 230\u003c\/p\u003e \u003cp\u003eIndex 231\u003c\/p\u003e \u003cp\u003e\u003cb\u003eMICHAEL M. POMPIAN, CFA, CAIA, CFP,\u003c\/b\u003e is a partner at Mercer Investment Consulting (formerly Hammond Associates) serving institutional and private wealth clients. Prior to joining Mercer, he worked at Merrill Lynch and PNC Private Bank, as well as the investment staff of a family office. Pompian holds the Chartered Financial Analyst (CFA) designation, is a Chartered Alternative Investment Analyst (CAIA) and a Certified Financial Planner (CFP). He is also a member of the CFA Institute (formerly AIMR) and the New York Society of Security Analysts (NYSSA). He holds a BS in management from the University of New Hampshire and an MBA from Tulane University. He is a regular speaker on the subject of behavioral finance and has published numerous articles on the subject. He is married with three sons and can be reached at mpompian@hotmail.com.\u003c\/p\u003e   \u003cp\u003eThe essence of being a great financial advisor is to be a great people person. While you must be technically competent, to really excel, you must understand how people behave in order to build lasting relationships and ultimately improve your clients' investment outcomes.\u003c\/p\u003e \u003cp\u003eFrom Michael Pompian, the bestselling author of \u003ci\u003eBehavioral Finance and Wealth Management\u003c\/i\u003e comes the next-step resource for achieving investing success by understanding your individual client's behavior type. As Pompian explains, there are four basic Behavioral Investor Types (BITs) that define an investor's personality and help advisors make an insightful and accurate assessment of their clients in order to better serve them.\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePreservers:\u003c\/b\u003e Noted for financial security and preserving wealth rather than taking risks to grow wealth. They are guardians of their assets and take losses very seriously.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eFollowers:\u003c\/b\u003e Lack direction with their money and investing. They follow the lead of their friends and colleagues or a general investing approach to make their investment decisions.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eIndividualists:\u003c\/b\u003e Engaged in the financial markets and may have unconventional views on investing. This \"contrarian\" mind-set may be helpful at times but may also cause this group to get irrationally anchored to their views.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAccumulators:\u003c\/b\u003e Interested in accumulating wealth and are confident that they will be successful investors. They like to adjust their portfolio allocations and holdings but may not wish to follow a structured plan.\u003c\/p\u003e \u003cp\u003eEngaging and informative, this reliable resource offers an overview of behavioral finance concepts and an introduction to behavioral biases. It also includes a detailed explanation of Behavioral Investor Type Diagnostic Testing and gives practical advice on capital markets and asset classes, asset allocation, and financial planning and investment advice for the four Behavioral Investor Types described. The author's BIT identification method is a multi-step diagnostic process that can help you zero in on the right plan that fits a particular client's investment expectations.\u003c\/p\u003e \u003cp\u003e\u003ci\u003eBehavioral Finance and Investor Types\u003c\/i\u003e provides financial advisors with a better sense of what drives investors. By using the information found here, you'll quickly become savvy about the range of investor behavior types and discover how that knowledge can better position you in your role as a trusted advisor.\u003c\/p\u003e  \u003cp\u003ePraise for \u003ci\u003e\u003cb\u003eBehavioral Finance and Investor Types\u003c\/b\u003e\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003e\"Michael has done yeoman's service in taking years of academic research and his own practitioner insights to illuminate the mandatory need to understand the virtues of the physiological implications of choice. He is bringing these essential findings to the forefront of untangling everyday investment thinking with the clear mandate of implementing sound investment decisions. His combined knowledge of the inherent drivers of investor behavior, and years of careful observation, clearly illuminates that shoe sizes, so to speak, vary a great deal.\"\u003cbr\u003e —\u003cb\u003eArnie Wood\u003c\/b\u003e, CEO, Martingale Asset Management\u003c\/p\u003e \u003cp\u003e\"Pompian brings something new to the field of behavioral finance books. By combining insights into our fundamental cognitive and emotional biases with insights into fundamental personality types, he provides concrete, practical action steps to avoid making big mistakes. In classic Pompian style, he does it with efficient, easy-to-read prose. You do not want to make important financial decisions without reading this book.\"\u003cbr\u003e —\u003cb\u003eStephen Horan\u003c\/b\u003e, Head, University Relations and Private Wealth, CFA Institute\u003c\/p\u003e \u003cp\u003e\"For centuries, great thinkers like Hippocrates and Plato have sought to explain the distinct personality types that drove human behavior. \u003ci\u003eBehavioral Finance and Investor Types\u003c\/i\u003e extends their constructs and identifies unique Behavioral Investment Types that help explain why investors have such difficulty in achieving their long-term goals. This book provides an outstanding road map for understanding our individual behavioral biases, embracing our unique investor personality, and allocating our portfolios to capitalize on our individual strengths. \u003ci\u003eBehavioral Finance and Investor Types\u003c\/i\u003e is required reading for any investor who wants to enhance the probability of achieving long-term investment success.\"\u003cbr\u003e —\u003cb\u003eMark Yusko\u003c\/b\u003e, CEO and CIO, Morgan Creek Capital Management\u003c\/p\u003e \u003cp\u003e\"Personality is linked to investors' cognitive errors, including overconfidence, and emotions, including regret. Michael Pompian contributes greatly to our understanding of investors' behavior as he exposes these important links.\"\u003cbr\u003e —\u003cb\u003eMeir Statman\u003c\/b\u003e, Glenn Klimek Professor of Finance, Santa Clara University\u003c\/p\u003e \u003cp\u003e\"Michael Pompian takes investors on a fascinating tour from behavioral finance through personality theory to what he calls Behavioral Investor Types. He manages to simplify the complex world of behavioral investing so that investors and their advisors can get their arms around this large subject. Best of all, Pompian provides clear guidance for how to avoid the behavioral traps that stand between investors and their financial goals.\"\u003cbr\u003e —\u003cb\u003eGregory Curtis, Chairman\u003c\/b\u003e, Greycourt \u0026amp; Co., Inc.\u003c\/p\u003e \u003cp\u003e\"Chock-full of practical applications, this book is an invaluable introduction to behavioral finance, a field of study that will make you a much better investor and advisor. It will certainly be required reading in our practice.\"\u003cbr\u003e —\u003cb\u003eHarold Evensky\u003c\/b\u003e, President, Evensky \u0026amp; Katz\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47988800454885,"sku":"NP9781118011508","price":73.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781118011508.jpg?v=1761781639","url":"https:\/\/k12savings.com\/products\/behavioral-finance-and-investor-types-isbn-9781118011508","provider":"K12savings","version":"1.0","type":"link"}