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Empowered Investor: A Guide to Building Better
Portfolios by Keith Matthews
Price $15.95>> 
 The
Psychology of Investing
Understanding Investor Behaviour and Avoiding Common Pitfalls
In our quest to build a successful investment experience, we
must review all potential roadblocks, problems or challenges that
keep us from succeeding. Two of the greatest roadblocks are:
- The conflicts of interest in the financial services industry
(discussed in the previous chapter)
- Irrational investor behaviour
Behavioural finance is a relatively new field that attempts to
better understand and explain how human emotions and cognitive errors
influence investors and their decision-making process. Money is
an emotional subject, and the choices we make in the wake of an
exciting stock tip or a plummeting portfolio affect our investment
results in real and often damaging ways. Quite simply, behavioural
finance is a merging of human psychology and the science of economics.
This area has critical implications for investing and is far more
important in determining the level of success in your investments
than many other technical-oriented benchmarks.
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