Behavioral Finance and Your Portfolio: A Navigation Guide for Building Wealth - Hardcover

by Michael M. Pompian (Author)

Become a more strategic and successful investor by identifying the biases impacting your decision making.

In Behavioral Finance and Your Portfolio, acclaimed investment advisor and author Michael M. Pompian delivers an insightful and thorough guide to countering the negative effect of cognitive and behavioral biases on your financial decisions. You'll learn about the "Big Five" behavioral biases and how they're reducing your returns and leading to unwanted and unnecessary costs in your portfolio.

Designed for investors who are serious about maximizing their gains, in this book you'll discover how to:

● Take control of your decision-making--even when challenging markets push greed and fear to intolerable levels

● Reflect on how to make investment decisions using data-backed and substantiated information instead of emotion and bias

● Counter deep-seated biases like loss aversion, hindsight and overconfidence with self-awareness and hard facts

● Identify your personal investment psychology profile, which you can use to inform your future financial decision making

Behavioral Finance and Your Portfolio was created for individual investors, but will also earn a place in the libraries of financial advisors, planners and portfolio managers who are determined to counteract the less principled and data-driven aspects of their decision making.

Front Jacket

Cognitive and emotional biases can wreak havoc with investor portfolios. Poor investment decision-making caused by behavioral errors, especially in times of high market volatility, leads to poor financial outcomes--a material problem for both new and experienced investors. Whether you're mired in loss aversion, suffer from anchoring bias, or you're sorting your portfolio into various mental accounts, investor biases will prevent you from maximizing your wealth. But you can learn to challenge your own biases and prevent costly investment errors!

In Behavioral Finance and Your Portfolio, veteran investor and advisor Michael M. Pompian delivers a thorough grounding in the most important investor biases you're likely to encounter when making crucial investment decisions. Perhaps the most critical insight, knowing the difference between emotional and cognitive biases, will help you understand what makes you tick as an investor. Full of case studies and quizzes, this book will help you identify and diagnose your own biases. You will become a better investor, even as you deal with the stresses of investing in the real world.

You'll learn to take control of your decision-making even when challenging markets can push fear or greed to uncomfortable levels. You'll also discover how to analyze your options, either alone or alongside your investment advisor, as well as how to make better investment decisions overall--and the benefits of backing up those decisions with hard data.

Relying on his decades of experience in financial markets as both an investor and advisor, Pompian shows you how to understand your unique behavioral investor type and how to improve decisions based on your individual tendencies. Perfect for individual investors, financial advisors, portfolio managers, and other financial professionals, Behavioral Finance and Your Portfolio will earn a place in the library of any conscientious investor hoping to gain perspective on cognitive patterns and biases that may be impairing their ability to achieve the best possible return on their investments.

Back Jacket

PRAISE FOR BEHAVIORAL FINANCE AND YOUR PORTFOLIO

"Personality is linked to investors' cognitive errors, including overconfidence and emotions such as regret. Michael Pompian's work contributes greatly to our understanding of investor behavior as he exposes these important insights into investor psychology."
--Meir Statman, Glenn Klimek Professor of Finance, Santa Clara University; author, What Investors Really Want

"Michael Pompian brings something new to the field of behavioral finance books. By combining insights into our fundamental cognitive and emotional biases and investor personality types, he provides concrete, practical action steps to avoid making big mistakes. In classic Pompian style, he does this with efficient, easy-to-read prose. You do not want to make important financial decisions without reading this book."
--Stephen Horan, Head of Private Wealth, CFA Institute; author, The New Wealth Management

"Many inefficiencies in the market are a result of how investors let their emotions dictate their investment decisions. Michael Pompian's work provides a framework to understand why these inefficiencies exist and how they can improve their investment portfolios."
--Jean L.P. Brunel, Editor, The Journal of Wealth Management

"Michael Pompian is a global authority and thought leader in the field of Behavioral Finance. I have worked closely with Michael for many years in an ultra-high-net-worth client advisory setting, and I have witnessed his application of the behavioral principles that he has developed over a 25-year consulting career. I have seen Michael navigate, adapt to, and mitigate complex behavioral biases while still accomplishing portfolio management risk and return objectives. Read this book!"

--Wesley Burns, CFA, CFP, Senior Family Office Investment Advisor

Author Biography

MICHAEL M. POMPIAN is Founder and Chief Investment Officer of Sunpointe Investments, an investment advisory and wealth management firm based in St. Louis, Missouri. He is the author of five books on finance, including Advising Ultra-Affluent Clients and Family Offices, Behavioral Finance and Wealth Management, and Behavioral Finance and Investor Types.