The Psychology of Investing, Fifth Edition

The Psychology of Investing is the first text of its kind to delve into the fascinating subject of how psychology affects investing. Its unique coverage describes how investors actually behave, the reasons and causes of that behavior, why the behavior hurts their wealth, and what they can do about it.

This text's material, however, does not replace traditional investment textbooks but complements them, helping students become better informed investors who understand what motivates the market.

- A psychological bias is described and illustrated with everyday behavior
- The effect of the bias on investment decisions is explained
- Academic studies are used to show why investors need to remedy the problem

Because data on investor psychology is rapidly increasing, the fifth edition contains many new additions to keep students up-to-date.

- The new Chapter 12: Psychology in the Mortgage Crisis describes the psychology involved in the mortgage industry and ensuing financial crisis.
- New sections and sub-sections include “Buying Back Stock Previously Sold”, “Who Is Overconfident,” “Nature or Nurture?”, “Preferred Risk Habitat,” “Market Impacts,” “Language,'and “Reference Point Adaptation.”