Applying Behavioural Finance in Australia
From the back cover ...
Insights from behavioural finance are increasingly finding their way into mainstream financial media and the consciousness of regular investors. However, often what is presented is vague and un-actionable, and designed for an unsophisticated audience.
We are all human. Behavioural biases apply to professional investors too, sometimes more so, but not necessarily in the obvious ways we often read about. They impact the way super funds choose asset managers, how asset managers forecast company earnings, how advisers engage with clients and the functioning of investment committees and trustee boards.
This book is different. It brings together international research with the author’s unique experience as a behavioural finance specialist consultant to a diverse range of Australian professional investors, corporate decision-makers and advisers.
Behavioural insights are translated into 12 actionable strategies. Where possible, the financial impacts of each strategy are quantified. The consequences are often hidden but are nonetheless real. Billions of dollars of Australians’ retirement savings are at stake.
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Key principles/topics discussed in the book
1. Capture the value of the value effect
2. Avoid the disposition effect
3. Overcome overconfident overtrading
4. Steady as she goes: low volatility & quality strategies
5. Ride the momentum effect
6. Avoid divergent diversification
7. Be smart about the tricky business of market timing
8. Know when to do it yourself
9. Find hidden truths in complex information
10. Think in groups without group think
11. Counter forecasting biases
12. Improve asset manager assessment
13. An integrated approach to behavioural investing in Australia
14. No more blood-letting: an optimistic view of the future