Investor Behavior -- Contents -- Acknowledgments -- Part One Foundations of Investor Behavior -- Chapter 1 Investor Behavior: An Overview -- Introduction -- Relevant Books in the History of Finance and Investment Thought -- Investor Behavior -- Purpose of the Book -- Distinctive Features of the Book -- Intended Audience -- Organization of the Book -- Part I: Foundations of Investor Behavior -- Part II: Personal Finance Issues -- Part III: Financial Planning Concepts -- Part IV: Investor Psychology -- Part V: Trading and Investing Psychology and Strategies -- Part VI: Special Investment Topics -- Summary -- References -- About the Authors -- Chapter 2 Traditional and Behavioral Finance -- Introduction -- Traditional Finance -- Classical Decision Theory -- Rationality and Utility -- Risk Aversion -- Modern Portfolio Theory -- Capital Asset Pricing Model and the Trade-Off between Risk and Return -- Efficient Market Hypothesis -- Behavioral Finance -- Behavioral Decision Theory and Bounded Rationality -- Prospect Theory and Loss Aversion -- Framing -- Heuristics -- Overconfidence -- Regret Theory -- Advances in Behavioral Finance -- Summary -- Discussion Questions -- References -- About the Author -- Chapter 3 Behavioral Economics, Thinking Processes, Decision Making, and Investment Behavior -- Introduction -- Behavioral Economics, Heuristics, and Decision Making -- Investment Heuristics and Investing in Financial Assets -- The Trust Heuristic and Decision Making -- Other Critical Decision-Making Heuristics -- Knightian Uncertainty versus Risk -- Animal Spirits -- Beauty Contest -- Herding -- Loss Aversion -- Disposition Effect -- Illusion of Control -- Overconfidence -- Overoptimism -- Overconfidence and Overoptimism -- Lack of Bayesian Updating -- Ambiguity Aversion -- Winner's Curse.

Rational Investor Decision Making in a World of Complex Information -- Summary -- Discussion Questions -- References -- About the Author -- Part Two Personal Finance Issues -- Chapter 4 Financial Literacy and Education -- Introduction -- The Nature of Financial Literacy -- Measuring Financial Literacy -- Examples of Financial Literacy Measures -- Measure 1-A Widely Used Measure -- Measure 2-A Composite Measure Based on Available Items -- Measure 3-A Measure Designed to Capture Human Capital -- Financial Literacy and Behavior -- Financial Literacy Education -- Summary -- Discussion Questions -- References -- About the Authors -- Chapter 5 Household Investment Decisions -- Introduction -- Financial Market Participation -- The United States -- An International Perspective -- Determinants of Stock Market Participation -- Market Friction Effects on Household Investment Behavior -- Transaction Costs -- Information Costs -- Taxes -- The Effects of Behavioral Biases on Household Investment Behavior -- Individuals with Mental Health and Cognitive Impairment Issues -- Individuals Who Experience Trauma -- Marriage and Households with Children -- Under-Represented Ethnic Minorities -- Immigrant Households -- Summary -- Discussion Questions -- References -- About the Author -- Chapter 6 Personality Traits -- Introduction -- A Structural Model of Personality -- The Biological Basis of the Five-Factor Model -- Risk-Taking Behavior -- Overconfidence -- Personality and Gender -- Personality as a Guide for Investors -- Summary -- Discussion Questions -- References -- About the Authors -- Chapter 7 Demographic and Socioeconomic Factors of Investors -- Introduction -- Literature Review -- Studies on Gender Effects -- Studies on Race Effects -- Studies on the White-Male Effect -- Studies on the Role of Education -- The Role of Wealth and Income.

Case Study: The Florida Department of Education Employees -- Florida Department of Education's Employee Survey -- Florida State Board of Administration's Investment Plan Administrative Data -- Measuring Investor Behavior -- Key Summary Statistics -- Empirical Estimation Results -- The Long-Run Financial Impact of the Gender and Race Differences -- Caveats -- Summary -- Discussion Questions -- References -- About the Author -- Chapter 8 The Effect of Religion on Financial and Investing Decisions -- Introduction -- Religions and Economic Factors: Dependence or Bifurcation? -- Does Religion Matter? -- Interplay between Religion and Political Economy -- Religion and Individual Investing Behavior -- Personal Traits -- Religion and Social Behavior -- Religion and Investor Psychological Behavior -- Religion and Social Investing -- Religion and Corporate Investment Decisions -- Summary -- Discussion Questions -- References -- About the Authors -- Chapter 9 Money and Happiness: Implications for Investor Behavior -- Introduction -- Can Money Buy Happiness? -- Measurements of Happiness -- Income and Happiness -- Work and Happiness -- Spending and Happiness -- Materialism and Happiness -- Macroeconomic Factors and Happiness -- Economic Growth and Happiness -- Economic Policy and Happiness -- Can Happiness Buy Money? -- Implications for Investor Behavior -- Summary -- Discussion Questions -- References -- About the Author -- Chapter 10 Motivation and Satisfaction -- Introduction -- Classical Economic Motivation -- Behavioral Economic Motivation -- Maslow's Hierarchy of Needs -- Physiological Needs -- Safety Needs -- Belongingness and Love Needs -- Esteem Needs -- Self-Actualization -- Criticism of Maslow's Hierarchy of Needs -- Criticism of Self-Actualization -- Overall Summary and Appraisal -- Higher Level Motivation -- Satisfaction -- Self-Actualization.

Maslow and the Dual Self -- Characteristics of the Self-Actualized -- Humanism -- Maslow and Investment Management -- Personal Finance Integration -- Life Planning and Satisfaction -- Summary -- Discussion Questions -- References -- About the Author -- Part Three Financial Planning Concepts -- Chapter 11 Policy-Based Financial Planning: Decision Rules for a Changing World -- Introduction -- Managing Behavioral Biases in the Financial Planning Engagement -- A Process for Developing Financial Planning Policies -- Step One-Engage in the Discovery Process -- Step Two-Identify Planning Areas and Best Practices -- Step Three-Combines Goals and Values with Best Practices -- Step Four-Test the Policy -- Step Five-Test Draft Policies with Clients -- Step Six-Conduct Periodic Reviews and Updates -- Applicability of Financial Planning Policies -- Policy-Based Financial Planning: The Strategic Perspective -- Example of Policies Derived through Stochastic Modeling -- Sample Case Applications -- Case One: The Retirement Dream House -- Case Two: Unable to Shift from Saving to Spending -- Summary -- Discussion Questions -- References -- About the Authors -- Chapter 12 Financial Counseling and Coaching -- Introduction -- Financial Counseling: A Historical Perspective -- Home Economics' Influence on Financial Counseling -- Financial Counseling as a Profession -- Theoretical Approaches: A Financial Counseling Perspective -- Family Resource Management Perspective -- Resource Acquisition Perspective -- Psychological Perspectives -- Systems Perspective -- Financial Counseling in the Twenty-First Century -- Financial Coaching -- Financial Therapy -- Life Planning -- Summary -- Discussion Questions -- References -- About the Authors -- Chapter 13 Financial Therapy: De-Biasing and Client Behaviors -- Introduction -- What Is Financial Therapy?.

Brief History of Financial Therapy -- Theoretical Foundations for Financial Therapy -- Integrative Therapy -- Client-Centered Therapy -- Behavioral Therapy -- Cognitive Therapy -- Family Systems Therapy -- Solution-Focused Therapy -- Behavioral Finance-Based Cognitive-Behavioral Therapy -- The Practice of Financial Therapy -- Future Research and Practice -- Summary -- Discussion Questions -- References -- About the Authors -- Chapter 14 Transpersonal Economics -- Introduction -- Historical and Spiritual Overview of Money -- World History of Money -- The Eco Model -- Economic Imbalances -- The Economic Time Dimension -- The Western Eco/House -- An Alternative Perspective -- Jainism -- The Open Eco in Financial Planning -- Summary -- Discussion Questions -- References -- About the Author -- Chapter 15 Advising the Behavioral Investor: Lessons from the Real World -- Introduction -- Risk, Return, and the Investor: A Complex Relationship -- A Premium for Stock Risk -- The Sentiment Roller Coaster -- Poor Timing -- Investments with People Problems -- Failing to Rebalance -- Overlooking Human Capital -- Reaching for Yield -- Underestimating the Impact of Inflation -- Thinking Too Much or Too Little about Taxes -- The Impact of Investor Behavior on Portfolios -- Suboptimal Strategies -- Paying for Bad Behavior: Why Investors Underperform Investments -- How Advisors Can Help the Behavioral Investor -- Know Clients' Investing and Risk-Taking History -- Lay the Groundwork during Calm Times -- Show, Don't Tell: Conduct Research for Clients -- Share Experiences -- Obtain Discretion -- Turning Bias into Benefit: How to Profit from Investor Behavior -- Gauging Sentiment -- Embracing the Risks Others Won't -- Profiting from Momentum -- Summary -- Discussion Questions -- References -- Disclosure -- About the Author.

Chapter 16 Retirement Planning: Contributions from the Field of Behavioral Finance and Economics.