Chapter 1: Investor Behavior: An Overview
H. Kent Baker
American University - Kogod School of Business
Goucher College - Department of Business Management
January 25, 2014
Investor Behavior: The Psychology of Financial Planning and Investing. H. Kent Baker and Victor Ricciardi, editors, 3-24. Hoboken, NJ: John Wiley & Sons, Inc., 2014.
“Investor Behavior: An Overview” is the introduction chapter for the book Investor Behavior: The Psychology of Financial Planning and Investing edited by H. Kent Baker and Victor Ricciardi that presents a historical perspective of investor psychology and theory. The field of investor behavior attempts to understand and explain investor decisions by combining the topics of psychology and investing on a micro level (i.e., the decision process of individuals and groups) and a macro perspective (i.e., the role of financial markets). The decision-making process of investors incorporates both a quantitative (objective) and qualitative (subjective) aspect that is based on the specific features of the investment product or financial service. Investor Behavior examines the cognitive factors (mental processes) and affective (emotional) issues that individuals, financial experts, and traders reveal during the financial planning and investment management process. In practice, individuals make judgments and decisions that are based on past events, personal beliefs, and preferences. The chapter also provides an overview of the emerging research topics covered in Investor Behavior and the abstract descriptions for the remaining 29 chapters of the book.
Number of Pages in PDF File: 24
Keywords: Investor psychology, personal finance, financial planning, trading and investing strategies, history of finance, investment theory, behavioral finance, behavioural finance, behavioral economics, history of investments, investment books
JEL Classification: A12, D81, G00, G30, G10, M00, M10, M41
Date posted: January 27, 2014 ; Last revised: February 11, 2014