CH-12 - I nvestments: A n Introduction 12 10e Chapter...

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Investments: An Introduction 10e Herbert B. Mayo Chapter 12 :Behavioral Finance and Technical Analysis
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2 Behavioral Finance Human behavior affects investment decisions. Merging finance and psychology Personal biases and emotions
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3 Behavioral Finance Overconfidence The Disposition effect Losses generate “regret” The Ostrich effect
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4 Behavioral Finance The house money Feeling that you are not risking your funds Familiarity Increases comfort Combining employment and investments
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5 Behavioral Finance Mental budgeting Categories Not perceiving interconnections among investments Cognitive dissonance Selective memory
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6 Behavioral Finance Herding Following the herd Lacking independent thought The need to overcome detrimental behavior
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7 Adaptive Market Hypothesis Use of trial and error Investors learn to adjust Behavior is part of the investment process Contributes to market efficiency
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8 Technical Analysis
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This note was uploaded on 09/21/2011 for the course FINANCE 4320 taught by Professor Omaral-nasser during the Spring '11 term at University of Houston-Victoria.

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CH-12 - I nvestments: A n Introduction 12 10e Chapter...

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