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Behavioral Finance - What Everyone Needs to Know (R) (Hardcover)
Loot Price: R1,076
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Behavioral Finance - What Everyone Needs to Know (R) (Hardcover)
Series: What Everyone Needs To Know (R)
Expected to ship within 12 - 17 working days
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People tend to be penny wise and pound foolish and cry over spilt
milk, even though we are taught to do neither. Focusing on the
present at the expense of the future and basing decisions on lost
value are two mistakes common to decision-making that are
particularly costly in the world of finance. People are also
tempted to throw good money after bad. Behavioral finance is the
field that sheds light on how people make decisions and make
predictable mistakes due to mental and emotional characteristics.
It also provides insights into how markets operate. Having a better
understanding of both can mitigate mistakes. Behavioral Finance:
What Everyone Needs to Know (R) provides an overview of common
shortcuts and mistakes people make in managing their finances that
can affect their wealth. An extensive discussion sets forth the
cognitive biases or errors in thinking that occur when people are
collecting, processing, and interpreting information. Emotional
biases that can create distortions in cognition and decision-making
are also covered, as are the influence of social factors, from
culture to the behavior of one's peers. These effects vary during
one's life, reflecting differences in cognitive ability due to age,
experience, and gender effects. Of great importance is framing, how
the presentation of a choice affects people's forecasts about the
stock market, claiming social security benefits, savings behavior,
mortgage choice, charitable contributions, and more. Throughout the
authors combine discussions of concepts, insights from research,
and examples from recent events. Among the questions to be
addressed are: How did the financial crisis of 2007-2008 spur
understanding human behavior? What are market anomalies and how do
they relate to behavioral biases? What role does overconfidence
play in financial decision- making? And how does getting older
affect risk tolerance?
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