Behavioural finance provides a realistic and comprehensive framework for understanding financial markets and decision-making. Incorporating insights from psychology, it enhances our understanding of investor behaviour, market dynamics, and risk management, leading to more effective investment strategies and improved financial outcomes. In this episode, Professor Meir Statman, a renowned expert in finance and behavioural finance, takes us on a captivating journey through the intriguing world of maximizing well-being through finance. Professor Statman is a distinguished financial expert and a leading authority in the field of behavioural finance. His groundbreaking research has shaped the understanding of investor behaviour and its impact on financial decision-making. Through his academic contributions and practical insights, Professor Statman has become a trusted guide in navigating the complex intersection of finance and human behaviour. In our conversation, he unravels the secrets of maximizing well-being through finance and the intricacies of the field. We explore the captivating world of behavioural finance and its connection to efficient markets, the distinction between normal and rational investors, the allure of lottery-like assets, and the downsides of consuming dividends. We unpack the aversion to realizing losses and the debate between dollar-cost averaging and lump-sum investing. We delve into the rising popularity of alternative investment strategies, the influence of status on rational investor behaviour, the role of financial advisors, and much more. Tune in for this enlightening conversation that will not only reshape your understanding of finance but human behaviour too.
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Behavioral Finance: The Second Generation — https://amzn.to/3qR7AmM
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Prof. Meir Statman — https://www.scu.edu/business/finance/faculty/statman/
'Behavioral Efficient Markets' — http://doi.org/10.3905/jpm.2018.44.3.076
'What Is Behavioral Finance?' — https://www.cfainstitute.org/-/media/documents/book/rf-publication/2019/behavioral-finance-the-second-generation.pdf
'Behavioral Finance: The Second Generation' — https://www.cfainstitute.org/-/media/documents/book/rf-publication/2019/behavioral-finance-the-second-generation.pdf
What Investors Really Want — http://doi.org/10.2469/faj.v66.n2.5
Explaining investor preference for cash dividends — http://doi.org/10.1016/0304-405x(84)90025-4
The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence — https://doi.org/10.1111/j.1540-6261.1985.tb05002.x
A Behavioral Framework for Dollar-Cost Averaging — http://doi.org/10.3905/jpm.1995.409537
Behavioral Aspects of the Design and Marketing of Financial Products — http://doi.org/10.2307/3665864
Options and structured products in behavioral portfolios — http://doi.org/10.1016/j.jedc.2012.07.004
Lottery Players/Stock Traders — http://doi.org/10.2469/faj.v58.n1.2506
Hedging Currencies with Hindsight and Regret — http://doi.org/10.3905/joi.2005.517170
Behavioral Portfolio Theory — http://doi.org/10.2307/2676187
Portfolio Optimization with Mental Accounts — https://www.cambridge.org/core/services/aop-cambridge-core/content/view/4B23CFB326982C52014A1BA447FA9244/S0022109010000141a.pdf/portfolio-optimization-with-mental-accounts.pdf
Making Sense of Beta, Size, and Book-to-Market — http://doi.org/10.3905/jpm.1995.409506
Affect in a Behavioral Asset-Pricing Model — http://doi.org/10.2469/faj.v64.n2.8
From Financial Advisers to Well-Being Advisers; Well-Being Advisers — http://doi.org/10.3905/jwm.2023.1.202