Chapter 8: Behavioral Finance and the Psychology of Investing
In the Chapter 8 module, you will
- Investigate the recent research into behavioral finance
- Explore the common weaknesses that typical investors exhibit
- Be introduced to the theories and practices of Technical Analysis
- Research the requirements of the Series 7 Registered Representative (a.k.a. Stockbroker) exam
By the end of this module, you should be able to
- Describe the recent research into behavioral finance and its implications for prudent, long-term oriented investors
- Relate the common weaknesses that typical investors exhibit and how to counteract them
- Research and utilize simple theories and practices of Technical Analysis in a controlled setting without placing much credence into their usage
- Relate the requirements for taking and passing the Series 7 Registered Representative (a.k.a. Stockbroker) exam
Presentation File and Study Guide
Presentation file - Study guide
And Now For Something Completely Different
Your Humble Instructor is a big fan of Monty Python's Flying Circus and all things silly. In the previous chapter, we saw how the Efficient Market Theorists were engaging in some silliness when they wrongly claim that no one can beat the market. In this chapter, the reach the pinnacle of silliness! Choosing stock investments using Technical Analysis is right up there with scanning tea leaves, palm reading, and practicing voodoo, in my humble opinion. The great thing for you is that you, too, can practice Technical Analysis without really knowing what you are doing because no one else really knows what they are doing either. Plus you can do this and get 10 extra bonus points in the chapter 8 bonus assignment. It is a no-lose situation!
Let's now take a look at some real silliness in action! See you on the next page.