A Review of “financial psychology, how not to be our worst enemy”

Author

Assistan Prof,. Institute for Monetary and Banking Studies

Abstract
In this book, behavioral challenges and common mental errors for investors are discussed and the author tried to provide strategies to combat undesirable habits. Over the years, the financial world has moved from the traditional financial paradigm to new approaches such as behavioral finance or neural finance. In the traditional financial paradigm, investors act rationally, markets are efficient, average-variance portfolio theory is established, and returns are determined based on risk. In contrast, the behavioral finance approach uses a more practical perspective in understanding human behavior and tries to incorporate more psychological and sociological issues into the analysis. In fact, in the behavioral finance approach, there are "normal" people, markets are "inefficient" and "behavioral portfolio" theory, and risk is not the only determinant of return. The book has been written in the field of finance and investment with a view to a new approach to behavioral finance. Although not so innovations in the book, given the emergence of behavioral finance issues in the investment climate and the challenges of investor decision-making in practice, the book in general can serve as a handbook for investors who are interested in behavioral finance.

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