Normal Investors, then and Now

Posted: 5 May 2005

See all articles by Meir Statman

Meir Statman

Santa Clara University - Department of Finance

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Investors were normal in 1945 when the first issue of the Financial Analysts Journal was published, and they remain normal today, 60 years later. But in between was a long period, starting in the late 1950s, when investors were described as rational. The portrait of investors as rational is the first foundation block of standard finance. Other foundation blocks are market efficiency, mean-variance portfolio theory, and the capital asset pricing model. This article provides descriptions of normal investors as they were portrayed in the FAJ and other finance journals before standard finance was introduced and as they have emerged recently in behavioral finance.

Keywords: Investment Theory, Behavioral Finance, Efficient Market Theory, CAPM, APT, Other Pricing Theories

Suggested Citation

Statman, Meir, Normal Investors, then and Now. Financial Analysts Journal, Vol. 61, No. 2, pp. 31-36, March/April 2005. Available at SSRN:

Meir Statman (Contact Author)

Santa Clara University - Department of Finance ( email )

500 El Camino Real
Santa Clara, CA 95053
United States
408-554-4147 (Phone)
408-554-4029 (Fax)

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