Behavioral Finance and Your Portfolio: A Navigation Guide for Building Wealth

ISBN-13: 9781119801610 / Angielski / Twarda / 2021 / 320 str.

Michael M. Pompian

Spis treści

Preface xv Acknowledgments xxi About the Author xxiii Part I Introduction To Behavioral Finance 1 Chapter 1: What is Behavioral Finance and Why Does It Matter? 3 Why Behavioral Finance Matters 5 Behavioral Finance: The Big Picture 6 Standard Finance versus Behavioral Finance 15 Chapter 2: Introduction to Behavioral Biases 23 Introduction 23 Behavioral Biases Defined 24 Why Understanding and Identifying Behavioral Biases is Crucial 25 Categorization of Behavioral Biases 27 Differences between Cognitive and Emotional Biases 27 Difference among Cognitive Biases 28 Emotional Biases 29 A Final Word on Biases 31 Part II Belief Perseverance Biases Defined and Illustrated 33 Chapter 3: Belief Perseverance Bias #1: Cognitive Dissonance Bias 35 Bias Description 35 Am I Subject to Cognitive Dissonance Bias? 38 Investment Advice 39 Chapter 4: Belief Perseverance Bias #2: Conservatism Bias 41 Bias Description 41 Am I Subject to Conservatism Bias? 44 Investment Advice 45 Chapter 5: Belief Perseverance Bias #3: Confirmation Bias 47 Bias Description 47 Am I Subject to Confirmation Bias? 51 Investment Advice 52 Chapter 6: Belief Perseverance Bias #4: Representativeness Bias 55 Bias Description 55 Examples of Representativeness Bias 56 Am I Subject to Representativeness Bias? 60 Investment Advice 62 Chapter 7: Belief Perseverance Bias #5: Illusion-of-Control Bias 65 Bias Description 65 Example of Illusion of Control Bias 66 Am I Subject to Illusion of Control Bias? 69 Investment Advice 70 Chapter 8: Belief Perseverance Bias #6: Hindsight Bias 73 Bias Description 73 Example of Hindsight Bias 74 Am I Subject to Hindsight Bias? 76 Investment Advice 77 Part III: Information Processing Biases Defined and Illustrated 79 Chapter 9: Information Processing Bias #1: Mental Accounting Bias 81 Bias Description 81 Practical Application 83 Am I Subject to Mental Accounting Bias? 85 Investment Advice 88 Chapter 10: Information Processing Bias #2: Anchoring Bias 91 Bias Description 91 Example of Anchoring and Bias 92 Am I Subject to Anchoring Bias? 94 Investment Advice 95 Bonus Discussion: Investment Strategies That Leverage Anchoring Bias 96 Chapter 11: Information Processing Bias #3: Framing Bias 99 Bias Description 99 Example of Framing Bias 101 Am I Subject to Framing Bias? 105 Investment Advice 107 Chapter 12: Information Processing Bias #4: Availability Bias 109 Bias Description 109 Example of Availability Bias 110 Am I Subject to Availability Bias? 113 Investment Advice 114 Chapter 13: Information Processing Bias #5: Self-Attribution Bias 117 Bias Description 117 Example of Self-Attribution Bias 118 Am I Subject to Self-Attribution Bias? 119 Investment Advice 121 Chapter 14: Information Processing Bias #6: Outcome Bias 123 Bias Description 123 Am I Subject to Recency Bias? 125 Chapter 15: Information Processing Bias #7: Recency Bias 129 Bias Description 129 Example of Recency Bias 130 Am I Subject to Recency Bias? 134 Investment Advice 135 Part IV: Emotional Biases Defined and Illustrated 137 Chapter 16: Emotional Bias #1: Loss Aversion Bias 139 Bias Description 139 Example of Loss Aversion Bias 140 Am I Subject to Loss Aversion Bias? 142 Investment Advice 144 Chapter 17: Emotional Bias #2: Overconfidence Bias 145 Bias Description 145 Examples of Overconfidence Bias 146 Am I Subject to Overconfidence Bias? 148 Investment Advice 151 A Final Word on Overconfidence 153 Chapter 18: Emotional Bias #3: Self-Control Bias 155 Bias Description 155 Example of Self-Control Bias 156 Am I Subject to Self-Control Bias? 159 Investment Advice 160 Chapter 19: Emotional Bias #4: Status Quo Bias 163 Bias Description 163 Example of Status Quo Bias 164 Am I Subject to Status Quo Bias? 165 Investment Advice 167 Chapter 20: Emotional Bias #5: Endowment Bias 169 Bias Description 169 Example of Endowment Bias 170 Am I Subject to Endowment Bias? 172 Investment Advice 173 Chapter 21: Emotional Bias #6: Regret Aversion Bias 175 Bias Description 175 Example of Regret Bias 176 Am I Subject to Regret Bias? 179 Advice 180 Chapter 22: Emotional Bias #7: Affinity Bias 183 Bias Description 183 Example of Affinity Bias 184 Am I Subject to Affinity Bias? 186 Investment Advice 188 Part V: Behavioral Investor Types 189 Chapter 23: Staying on Target to Reach Financial Goals is Hard 191 Non-Financial Examples of Self-Defeating Behavior 192 Financial Examples of Self-Defeating Behavior 196 Chapter 24: Introduction to Behavioral Investor Types 201 Introduction 201 What is My Behavioral Investor Type? 204 Step 1: BIT Orientation Quiz 205 Step 2: Bias Identification Quiz 210 Step 3: Advice for Each BIT 216 Summary 216 Chapter 25: Preserver Behavioral Investor Type 217 Upside/Downside Analysis 219 Bias Analysis of Preservers 220 Advice for Preservers 224 Chapter 26: Follower Behavioral Investor Type 225 Upside/Downside Analysis 227 Bias Analysis of Followers 228 Other Important Follower Biases: Hindsight, Cognitive Dissonance and Regret 232 Advice for Followers 233 Chapter 27: Independent Behavioral Investor Type 235 Upside/Downside Analysis 237 Bias Analysis of Independents 238 Self-Attribution 240 Conservatism Bias 241 Representative Bias 242 Advice for Independents 242 Chapter 28: Accumulator Behavioral Investor Type 243 Upside/Downside Analysis 245 Accumulator Bias Analysis 246 Advice for Accumulators 251 Chapter 29: Asset Allocation Case Studies for Each Behavioral Investor Type 253 Part VI: Behavioral Aspects of Portfolio Implementation 271 Chapter 30: Behavioral Finance Aspects of the Active versus Passive Debate 273 The Logic of Passive Management 274 The Potential Benefits of Active Management 274 Advice: Use the Best Practical Allocation for Your Portfolio 277 Chapter 31: Behaviorally Aware Portfolio Construction 279 Introduction 279 Goals-based Investing 280 Consolidating Accounts into a Portfolio View 281 Portfolio Approach 282 Chapter 32: Behavioral Finance and Market Corrections 285 The Most Recent Panic 286 Index 291

O autorze

MICHAEL M. POMPIAN 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 Advising Ultra-Affluent Clients and Family Offices, Behavioral Finance and Wealth Management, and Behavioral Finance and Investor Types.