Part One

Introduction to Behavioral Finance

The purpose of this book is to identify various types of investors and how best to deal with managing their behavioral attributes for the purpose of reaching financial goals. The foundational elements of each type are the behavioral biases that each investor exhibits. In order to understand the origins of the biases and how to use them, it is critical to learn about the subject of behavioral finance. Part One of the book provides both an introduction to the subject of behavioral finance and also an introduction to 20 of the most common investor biases. Part One starts with a discussion of why attaining financial goals is so difficult for so many people around the world.

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