Finance for Normal People shows how behavioral finance offers numerous insights into the performance of investors and managers as well as the functioning of markets.
Meir Statman, a founder of behavioral finance, provides a unified approach to understanding financial behavior. He draws on his extensive experience and the most insightful research to enhance our awareness about the short-cuts and errors that normal people make in financial decisions and planning. He also emphasizes the importance learning the lessons of behavioral finance and applying them to banish ignorance, gain knowledge, and increase the ratio of smart to stupid behavior on our way to what we want.
Behavioral finance is finance for normal people who experience cognitive and emotional errors, including overconfidence, exaggerated fear, and unrealistic hope. Normal people want to beat the market and feel pride they make gains and regret when they make losses. They also care about their families and social values. Normal people make important decisions about forming portfolios, saving and spending in working years and retirement, and readily taking gains while being reluctant to realize losses. As a result, normal people's wants and errors affect financial markets.
With financial markets uncertain, standard approaches to finance suffer from wide cracks between theory, guidance, and evidence. With ordinary people uneasy about their financial future, Finance for Normal People encourages changing how we think and act in the pursuit of our goals.
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Meir Statman, Glenn Klimek Professor of Finance, Leavey School of Business, Santa Clara University
Meir Statman is the Glenn Klimek Professor of Finance at the Leavey School of Business, Santa Clara University. 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 three Baker 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.
Meir received his Ph.D. from Columbia University and his B.A. and M.B.A. from the Hebrew University of Jerusalem.