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The Behavioral Investor

The Behavioral Investor

By Daniel Crosby

The Behavioral Investor. Harriman House, 2018.

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20 mins read

17 Key insights

A brief summary of The Behavioral Investor

A clinical psychologist explores the diverse behaviors that inform our ability to make sound financial investments, with advice for modifying your actions so you can be more rational in your decision-making.

Key insights in The Behavioral Investor

1
What do you get from this book? A psychologist’s guide to controlling behavior so you can make profitable investments
2
The foundation of financial investment is humanity’s ability to conceptualize ideas, and a shared belief in money
3
Human brains are built to make quick decisions, which isn’t conducive to generating reliable investments
4
There’s a mind-body connection that causes investors to make questionable decisions when loss-induced fear arises
5
Creating a system that combats the different types of risk investment, and the resulting stress, is crucial for financiers
6
When we attempt to satisfy our ego, we forego the truth in favor of our own agendas and biases
7
By clinging to conservatist ideology, we risk repeating our mistakes and making bad investments
8
People pay more attention to stories than they do objective data and react according to their emotions
9
While limited emotions can have a positive effect on human behavior, high emotions negatively impact investment decisions
10
Overhauling your portfolio so that it’s free of ego and conservativism requires you to trust the process
11
You don’t need to eliminate attention and emotion from your investments, you just need to manage them
12
Smart financiers shun passive and active investment, taking only what works and leaving the rest
13
Behavioral investors follow a set of guidelines that make the most of the psychological and physical factors influencing us
14
Find the courage to look beyond the present and perceive how changes to the market may impact your future goals
15
Summary of the key insights
16
Selected critiques in brief
17
Final word

Who should read The Behavioral Investor

Investors • venture capitalists • CEOs • stockholders • economists • anyone interested in playing the stock market

About the author of The Behavioral Investor

Dr. Daniel Crosby is a New York Times bestselling author whose books on investing, including The Laws of Wealth, have won multiple awards. He is also a behavior finance expert, and board-certified psychologist, as well as the founder of Nocturne Capital, an asset management firm that combines investment strategy with behavioral science.

author avatar

Daniel Crosby

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