Behavioural Finance & Investment Implications - Inhouse

Background
Behaviour Finance is a relatively new area in the field of Investment. In contrast to Efficient Markets Theory it examines psychological bias as opposed to the neutral Rational Investor behaviour expected in classical investment theory.

Both the recent financial crisis and laboratory experiments have indicated the reality of Behavioural Finance and hence its importance.

This short briefing details the main facets of Behavioural Finance with important implications for all those involved in Investment.

Content
How perception can be faulty

Rational minds can be irrational

Investor defects

- Overconfidence - Hindsight bias

- Short Term Focus - Hot Hand Facility

- Mental Accounting - Anchoring

- Regret - Trend Continuation

Tools to overcome Behavioural Bias

Rules review from successful Investment Managers that help overcome bias.