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Friday, May 6, 2011

How 'Heuristics' and 'Prospect Theory' can Cause Inaccurate Financial Decisions

Behavioral finance is a financial reality that may sometimes get brushed under the rug. Investors, fund managers and analysts may like to think they are completely sound in their judgement all the time, but the fact is people also use different methods when buying stocks, get tired, make mistakes and rely on back up psychological processes when making quick or rushed financial decisions. Not all these variables are logical and contribute to stock market psychology.

Complete article link: http://www.helium.com/items/2151778-how-behavioral-finance-influences-financial-decisions

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