Behavioral finance is a field of finance that proposes psychology-based theories to explain irrational investor decisions. Such decisions result from cognitive and emotional biases that can cause financial market values to drift substantially away from fundamental values.
This course explains the different biases investors have in behavioral finance and how portfolio management suggests it should be dealt with.
On completion of this course, you will be able to:
- Identify the key behavioral biases that lead to suboptimal investment decisions
- Recognize the different explanations of markets given by behavioral finance and modern portfolio theory.
Portfolio Management – Behavioral Theory
Topic 1: Key Tenets of Behavioral Finance
Topic 2: Behavioral Portfolio Management in Practice