What Investors Really Want: Know What Drives Investor Behavior and Make Smarter Financial Decisions Hardcover – Nov 16 2010
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About the Author
Meir Statman is the Glenn Klimek Professor of Finance at the Leavey School of Business, Santa Clara University, and Visiting Professor at Tilburg University in the Netherlands. His research on behavioral finance has been supported by the National Science Foundation, CFA Institute, and Investment Management Consultants Association (IMCA) and has been published in the Journal of Finance, Financial Analysts Journal, Journal of Portfolio Management, and many other publications. A recipient of two IMCA Journal Awards, the Moskowitz Prize for Best Paper on Socially Responsible Investing, and three Graham and Dodd Awards, Statman consults with many investment companies and presents his work to academics and professionals in the U.S. and abroad.
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Top Customer Reviews
What Investors Really addresses exactly what the title says it will address. The book is an extremely thorough, and very well researched - as it covers many different types of investment personalities, fears and desires. It covers many aspects of emotions that investors experience, as they want safety, well fed pride, a sense of social exclusivity, and exceptional returns. Statman covers aspects of investor philanthropy, tax evasion, and will & estate planning to investing as a player wanting to win, gaining social status, and the tendency not to want to own up to losses. With a great sense of humour, Statman identifies and pokes fun at one tendency or another - found in all of us.
Great read for any investor, or investor you know.
Most Helpful Customer Reviews on Amazon.com (beta)
It is also sobering to know that being a retail trader is like playing tennis against an unknown professional player who holds both superior knowledge and better equipment/techniques.
Prof. Statman's research on the key role of financial advisors is very enlightening. Financial advisors main job is to manage investors financial well-being rather than manage just their investments.
Prof. Statman's research also shows why so many retail and institutional investors share the same cognitive errors that cause them to make poor investment decisions. His research strongly encourages investors to invest in well diversified portfolios and keep emotions at bay by not hanging onto losers due to emotional attachment. He says that wanting to get even (get our money back) has probably caused more destruction on investment portfolios than anything else. Reluctance to realize losses is also great news for managers of terrible mutual funds.
And he tells us about cognitive impairments among older people and the problems associated with such mental decline. This is very important to be aware of and be prepared for regardless of your age.
In summary, this book is multi-dimensional and extremely well researched and well written. Investing your money and your time in this book should pay handsome dividends in your life.
This is a must read for any newbie planning to invest some hard earned cash into stocks. In fact, I would go so far as to say that a lay person should NOT play in stocks without understanding some of the `behavioral' aspects of investing that the author talks about.
My only regret..why didn't I come across this book in 2007, before the markets tanked!!
As an advisor of over 25 years, I cringe when I hear the question, "do you have any hot tips about where to put my money?" His title "What Investors Really Want" says it all. It is my job to help them explore what it is they really want, and Meir's book will greatly add to the strong foundation that has already been laid by his teaching.
As Meir shows, there is academic proof that there is a better way, and that it is our emotional investing that gets us in trouble.
As Meir states often, "investors are not rational, they are normal."
For a deeper understanding of the behavior and the science and how they can work together for successful investing, read Meir's book.
Investors want to feel good and safe to maximize their emotional well being. Our desire for that feel good feeling drives us to buy stocks in up markets, only to panic in down markets and sell in an effort to feel safe. We also feel good thinking we are smarter than the person on the other side of any trade.
Beyond emotional well being, investors want to express their values, tastes and status. Hedge funds, for example, signify that one is a sophisticated investor and member of an exclusive club.
This is truly one of the great books on behavioral finance. If you want to learn more about your behavioral traits, this is a must read. It had me thinking the whole way through, and I could identify in many of the irrational ways I want to react. It was also a very entertaining read and one of the few books I just couldn't put down.
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