list of the 15 best behavioral finance books
here is the list of behavioral finance books so you don’t have to spend hours and hours in stores to find the best ones.
- predictably irrational (get this book)
- thinking, fast and slow (get this book)
- Misbehaving: The Making of Behavioral Economics (get this book)
- The Behavioral Investing Booklet (get this book)
- Behavioral Finance: Insights into Irrational Minds and Markets (get this book)
- Behavioral Finance and Wealth Management(get this book )
- Behavioral Finance: Psychology, Decision Making, and Markets (Get This Book)
- Behavioral Finance: Understanding the social, cognitive, and economic debates (wiley finance) (get this book)
- behavioral finance and types of investors(get this book)
- beyond greed and fear( get this lib ro )
- inefficient markets ( get this book )
- personal benchmark ( get is a book )
- Behavioral Finance Handbook (get this book)
- Advances in Behavioral Finance (Behavioral Economics Roundtable Series) (get this book)
- Advances in Behavioral Finance, Volume II (get this book)
Let’s discuss each of the behavioral finance books in detail, along with their key points and reviews.
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#1 – predictably irrational
by dan ariely
This book offers a very interesting perspective on how the human brain works in the most irrational way, even when we are actually deliberately trying to make the best rational decision.
book review
The placebo effect is one of the classic examples of how our brain works, and this book brings you many similar examples from different walks of life. the author has simply combined common experiences with innovative research experiments to counter the common belief that humans generally behave rationally. As you read, you’ll realize how emotions, expectations, social norms, and other unseen forces cause us to make the same mistakes every day. however, this irresponsible behavior is neither meaningless nor random, rather it is systematic and predictable. In short, the book explains how unknown occult forces control our predictably irrational mind during a decision-making process.
the best take away from this book
- The concept of behavioral science is supported by common examples, which makes it easier for us to understand what the author is trying to convey through the text.
- This book can be an interesting read as well as academically useful for students seeking behavioral finance.
#2 – thinking, fast and slow
by Daniel Kahneman
As the name clearly suggests, this book mainly explains how our mind behaves, be it in a fast, spontaneous and emotional way or in a deliberately slow and logical way. discusses the pros and cons of both ways of thinking.
book review
This book is very insightful and lucid, constantly throwing intellectually surprising elements at you. therefore, we find it entertaining and sometimes moving. engages us in animated conversation with the author as he reveals the various secrets of our minds. The book guides us to understand which of our intuitions can be trusted and in which scenario slow thinking is the best option. There are multiple practical and informative insights provided in the book that are based on both professional and personal experiences. if we are able to follow some of the techniques that the author offers, we will realize that we can avoid some of the mental mistakes that usually get us into trouble.
the best take away from this book
- The book discusses the two ways of thinking in great detail with some very interesting and wacky examples.
- It can help us uncover many of our cognitive biases and fallacies, which would otherwise form part of our daily life.
#3 – misbehaving: the creation of behavioral economics
by ricardo h. thaler
this book is the autobiography of nobel laureate richard thaler in which he has covered the basics of behavioral economics.
book review
The book gracefully presents a wealth of evidence to clearly demonstrate how the human mind misbehaves. the illustrations are engaging and often amusing as they try to explain things we usually don’t intend to discuss. it can potentially change your perception of the economy and the world. The book reveals that we often succumb to our cognitive biases and make decisions that are considered aberrations of rational thought. this is what has been called misconduct in the text.
What is most important to know is that these bad behaviors often have serious consequences. Most of the acts of misconduct illustrated in the book are based on the author’s personal experience. therefore, he can offer useful advice to readers on how to make better decisions in the mysterious world we live in.
the best take away from this book
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- provides a first-hand account of the entire illustrious professional career of a leading economist.
#4 – the behavioral reversal booklet:
how not to be your own worst enemy
by james montier
The book looks at some of the most common behavioral challenges faced by investors and explains how they can affect the investment decision-making process.
book review
This book outlines many proven ways to identify and avoid the pitfalls of investor bias. one of its most important messages is that we should learn from our past investment mistakes so we don’t repeat them in the future. explains in a straightforward and simple style the various principles of behavior that can help us maintain a successful investment portfolioportfolio investmentportfolio investments are investments made in a group of assets (stocks, debt, mutual funds, derivatives, or even bitcoins) rather than of a single asset with the objective of obtaining returns that are proportional to the risk profile of the investor. read more and obtain superior returns. therefore, it is an easy and entertaining read for individual investors with little or no behavioral finance experience. In short, this book can provide you with a solid foundation for immersing yourself in the fascinating world of investing.
the best take away from this book
- can help you understand the different ways in which human behavior interacts with financial marketsfinancial marketsthe term “financial market” refers to the market where activities such as the creation and trading of various financial assets, such as bonds, take place , stocks, commodities, currencies and derivatives. provides a platform for sellers and buyers to interact and trade at a price determined by market forces.read more.
- It can also help you realize your biases and overcome them in the process.
- describes the main fallacies associated with making investment decisions, such as loss aversion, over-optimism, hindsight bias hindsight bias is a psychological tendency that causes the individual to believe that they had correctly predicted the outcome of a past event after knowing the actual outcome. it is often referred to as the “knew it all along” phenomenon or “progressive determinism”. it gives people the confidence to predict future events as well. read more, etc.
#5 – behavioral finance: insights into irrational minds and markets
by james montier
The book tends to build a relationship between the financial products available on the market and the theories of behavioral finance, a field of study that has been gaining ground in recent decades.
book review
The book conveys the simple belief that investors in the real world are fundamentally non-rational. The author provides many practical examples to explain the various theories in this emerging field of study, eventually indicating that most investment decisions are irrational in nature. can be useful for institutional investorsinstitutional investorsinstitutional investors are entities that pool money from a variety of investors and individuals to create a large sum that is then given to investment managers who invest it in a variety of assets, stocks, and securities. Banks, NBFCs, mutual funds, pension funds, and hedge funds are all examples. Read More fund managers, asset allocators, strategists, corporate financiers, etc. must read this book. it can be equally useful for students pursuing an MBA or other disciplines related to finance and investment.
the best take away from this book
- The book links commercially available financial products with behavioral finance theories.
- It can be useful to both established investors and aspiring finance professionals.
#6 – behavioral finance and wealth management
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how to build optimal portfoliosoptimal portfolioportfolio optimization refers to the strategic process of making improvements or positive changes to an investor’s portfolio containing multiple assets. the sharpe ratio helps to analyze the returns of an optimal portfolio.read more that take into account the biases of investors (wiley finance)
by michael m. Pompeian
Prejudice really is your enemy. you don’t want your limited beliefs to act as an obstacle to the right choice you could have made. if so, take a look at the review and the best conclusions.
book review
Review: If you want to identify your biases and want research to back up your claims, this is the book for you. You will learn a lot about investment biases and as you become more aware of them, it will be easier to get rid of them. this book is applicable not only for you; Quite; It would help you with your clients to identify and correct your clients’ flaws so that you can add great value to them and their investment decisions.
the best takeaway from this best behavioral finance book
- The best part of the book is that it is very relevant and professional (helping investors) and people who invest for themselves. it points out all the biases and helps you to overcome them.
- it is very brief, lucid and at the same time complete to understand and act.
#7 – behavioral finance: psychology, decision making and markets
by lucy ackert & richard deaves
This best behavioral finance book will illustrate three separate things to you in a woven form: the psychology of investors, how their psychology affects their decision making, and at the same time, how the market is affected.
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book review
review: This behavioral finance book is a great resource for anyone who likes to invest or helps invest. The reason is that this book is the result of a lot of market research and surveys on how things work for retail investors retail investors a retail investor is an individual non-professional investor who tends to invest a small sum in stocks, bonds, , mutual funds, stock exchange-negotiable funds, and other baskets of securities. they often take the services of online or traditional brokerage firms or advisors for making investment decisions. read more, professional managers, traders, analysts, etc. and everything that the authors collected, they presented all the materials in the most structured way for consumption. of investors who would like to improve their investment decisions and, consequently, ensure maximum wealth.
the best takeaway from this best behavioral finance book
- If you need a “why” test to illustrate what psychology is responsible for erratic investor behavior, you’ll find all the answers in this book. they are not invented or the product of the author’s imagination. they are practical and collected.
- the materials are structured so well that you could really use them as a reference book for your class (if you are a student) or to help any client increase their wealth. .
#8 – behavioral finance:
understand social, cognitive and economic debates (wiley finance)
by edwin burton & sunit shah
This is an overview book on much broader aspects of the spectrum. The social, economic and cognitive issues responsible for the psychology of finance will be discussed.
book review
review: This important book on behavioral finance is a great book when it comes to value. but it is a bit expensive in terms of only 200 pages. however, this book does justice to everything it has mentioned delivering. If we break the book down into useful sections, it would be this: 90 pages on the psychology of finance; and 130 pages on finance & Empirical tests conducted on “value” and “reversal effects”. this book is presented in an easy to understand way, especially for students who are getting bored with behavioral finance classes.
the best conclusion of this book on behavioral finance
- You will find a lot of information on an efficient market hypothesis (EMH) and how it evolved, and also covers anomalies and serial correlation.
- This can be called an advanced book on behavioral finance without the vanity language.
#9 – behavioral finance and types of investors:
behavior management to make better investment decisions (wiley finance)
by miguel pompeiano
Here the author goes beyond the usual behavioral finance clichés and looks at it from a completely different perspective.
book review
Review: Once you pick up this behavioral finance book, you’ll learn about four types of investors and how they make decisions. The first type of investor are conservatives who preserve wealth rather than take risks to improve their wealth. The second type of investor is the followers who take the help of other people to make important investment decisions. The third type of investors are the individualists who are always involved in the financial marketfinancial marketThe term “financial market” refers to the market where activities such as the creation and trading of various financial assets such as bonds, shares, commodities, etc. are carried out. foreign exchange and derivatives place. provides a platform for sellers and buyers to interact and trade at a price determined by market forces. read more and get an unconventional way of looking at investments. and the last type of investor are those who are called accumulators and who love to accumulate wealth and trust that they will become successful investors in the near future.
the best conclusion to this important book on behavioral finance
- This behavioral finance book has distilled it all into four types so that investors can recognize themselves and act accordingly.
- This book also cites years of academic research, which would help the average investor to make important decisions about their investments.
#10 – beyond greed and fear:
Understanding Behavioral Finance and Investment Psychology (Financial Management Association Survey & Synthesis)
by hersh shefrin
Mistakes push us into fear and the more mistakes we make, instead of learning from them, we get into more and more fear. As a result, when some lucrative opportunities arise, we jump in and greed enters our lives. but what if you can go beyond fear and greed! this book will show you how.
book review
review: If you read this behavioral finance book, you will feel entertained and at the same time learn the details of behavioral financebehavioral financebehavioral finance refers to the study that focuses on explaining the influence of psychology in the decision-making process of investors. explains the occurrence of irrational decision making in the financial market when it is expected to be a manifestation of rational decisions and an efficient market.read more. according to the book, investors learn slowly and make mistakes along the way. This book will help you stop those mistakes and find a solution for you and your clients. but in some places the author is contradictory and sometimes there are too many words. All in all, a good read for people who are indirectly related to trading (meaning this book is not for a full-time trader, but it is useful for investors).
The best takeaway from this best book on behavioral finance
- Three concepts are explained very well. they are heuristic biases, market inefficiency, and framework dependency.
- The author goes into great detail about human behaviors and does justice to his explanations.
#11 – inefficient markets:
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an introduction to behavioral finance (clarendon lectures in economics)
by andrei shleifer
it is original. is different. and makes you think about behavioral finance in a new way.
book review
review: This excellent book on behavioral finance is best suited for those who are tired of reading old, crude articles on behavioral finance. This book presents a great way to look at behavioral finance. The author has thought a lot about this book before writing it, and the writing reflects that. first, the author describes the foundations of the efficient market hypothesis (emh)efficient market hypothesis (emh)the efficient market hypothesis (emh) states that stock prices indicate all relevant information and are universally shared, which makes it impossible for investors to earn more – average constant returns. Famed economist Eugene gave the idea of the Efficient Market Hypothesis in the 1960s. Read More and then introduces his thinking.
the best takeaway from this best book on behavioral finance
- This book is good value for money. if you want to understand the exact psychology behind behavioral finance, this book is for you.
- this is the best introductory book you will ever find on behavioral finance.
#12 – personal reference point:
integrating behavioral finance and investment management
by charles widgeter & daniel crosby
this book can be concentrated on three two letters, pb (personal benchmark), bf behavioral finance) & im (investment management) and this book details these three terms in great detail.
book review
review: is the most personal book on behavioral finance I have ever read. why? because in this book, the authors took a different approach to explaining risk. risk is a very personal thing. And no matter how many statistical models we use to quantify risk, risk will remain highly personal. that’s why a personal reference point is important, and after reading this book, you will be able to integrate three concepts into one chain. That is why it is so important to read this book. behavioral finance is evolving, and quantifiable statements alone will not justify its scope and purpose.
the best conclusion to this important book on behavioral finance
- This best book on behavioral finance not only contains all the psychological biases; it also talks about all the tangible solutions for these biases. therefore, readers can work on their biases.
- It is important to know your emotional direction before entering the field of investing. And this book will show you how to give your mind an emotional direction to think hard before you enter the field of investing.
#13 – behavioral finance handbook
by brian bruce
This book has been formed and written very well. read the review and top takeaways to find out more.
book review
Review: As mentioned, this book is really a behavioral finance manual. If you’re wondering what this highly technical book should be, you’re wrong. this book is not technical; Rather, you can say that this book presents simple econometrics econometrics that deals with the application of economic theories, statistical inference, and mathematics to the formulation of economic policies and the forecasting of future trends. analyzes real-world and historical data for statistical and hypothesis testing. read more modeling and also analyzes experimental, survey, or revealed preference data. Furthermore, this book also talks about recent developments in the industry regarding behavioral finance. Along with that, you’ll also learn to appreciate recent research presented within the premises of the book. In simple terms, if you read this book, you would sharpen your investment saw; If not, you may be missing out on something great if you want to get into the world of investing anytime soon.
the best conclusion to this important book on behavioral finance
- This book is complete and perfect for beginners. If you are just starting out, you can read this book. this book is lucidly written and the chapters are short. at the same time, each chapter is woven together cohesively to provide maximum benefit to readers.
- if you are a finance student, this is a book you cannot put down. .
#14 – Advances in Behavioral Finance (Behavioral Economics Roundtable Series)
by richard h. thaler
leave the trail behind and if you think you know enough about behavioral finance, welcome to the advanced world.
book review
review: this book is a good collection of articles designed to surprise its readers. But keep in mind that if he is an average investor, he may not be able to appreciate the value he provides. you need to do your homework before diving into this book. there are plenty of statistics, and academic language is used judiciously throughout this book. So, if you’re thinking of reading this book from which you’ll gain multiple perspectives on behavioral finance, you at least need to know the basics of behavioral finance first.
the best take away from this book
- If you are a finance student, you will appreciate this nice collection.
- This collection may be old, but it can easily be called a bible for any academic researcher. who is interested in behavioral finance.
#15 – advances in behavioral finance, volume ii:
(the behavioral economics roundtable series)
by richard h. thaler
there was a need for volume two as the first volume was too old. so the editor needed to add recent developments in this volume.
book review
Review: This book is an update of the previous volume and there are many things to learn in this recent volume. People who complain about the sanity of an old paperback will find great value in this book as all recent developments are given in this section. however, since it was published in 2005, it would still be considered ancient if we compare it from today’s perspective. This book is recommended for those interested in pursuing higher studies in behavioral finance.
the best take away from this book
- This book is very up-to-date and comprehensive at 744 pages.
- This book features twenty recent articles so you can understand how behavioral finance has evolved over the years. not recommended for beginners, but if you want to pursue behavioral finance, this would be an invaluable resource.
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