Behavioral Finance and Your Portfolio. Michael M. Pompian
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Table of Contents
1 Cover
5 Preface A Challenging Environment Why This Book? Who Should Use This Book? When to Use This Book Plan of the Book
8 PART I: INTRODUCTION TO BEHAVIORAL FINANCE 1 What Is Behavioral Finance and Why Does It Matter? Why Behavioral Finance Matters Behavioral Finance: The Big Picture Standard Finance versus Behavioral Finance Notes 2 Introduction to Behavioral Biases Introduction Behavioral Biases Defined Why Understanding and Identifying Behavioral Biases Is Crucial Categorization of Behavioral Biases Differences between Cognitive and Emotional Biases Difference among Cognitive Biases Emotional Biases A Final Word on Biases
9 PART II: BELIEF PERSEVERANCE BIASES DEFINED AND ILLUSTRATED 3 Belief Perseverance Bias #1: Cognitive Dissonance Bias Bias Description Am I Subject to Cognitive Dissonance Bias? Investment Advice Note 4 Belief Perseverance Bias #2: Conservatism Bias Bias Description Am I Subject to Conservatism Bias? Investment Advice Notes 5 Belief Perseverance Bias #3: Confirmation Bias Bias Description Am I Subject to Confirmation Bias? Investment Advice 6 Belief Perseverance Bias #4: Representativeness Bias Bias Description Examples of Representativeness Bias Am I Subject to Representativeness Bias? Investment Advice Note 7 Belief Perseverance Bias #5: Illusion-of-Control Bias Bias Description Example of Illusion of Control Bias Am I Subject to Illusion of Control Bias? Investment Advice Notes 8 Belief Perseverance Bias #6: Hindsight Bias Bias Description Example of Hindsight Bias Am I Subject to Hindsight Bias? Investment Advice
10
PART III: INFORMATION PROCESSING BIASES DEFINED AND ILLUSTRATED
9 Information Processing Bias #1: Mental Accounting Bias
Bias Description
Practical Application
Am I Subject to Mental Accounting Bias?
Investment Advice
Notes
10 Information Processing Bias #2: Anchoring Bias
Bias Description
Example of Anchoring and Bias
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