Finance for Normal People: How Investors and Markets Behave

Finance for Normal People teaches behavioral finance to people like you and me - normal people, neither rational nor irrational. We are consumers, savers, investors, and managers - corporate managers, money managers, financial advisers, and all other financial professionals.

The book guides us to know our wants-including hope for riches, protection from poverty, caring for family, sincere social responsibility and high social status. It teaches financial facts and human behavior, including making cognitive and emotional shortcuts and avoiding cognitive and emotional errors such as overconfidence, hindsight, exaggerated fear, and unrealistic hope. And it guides us to banish ignorance, gain knowledge, and increase the ratio of smart to foolish behavior on our way to what we want.

These lessons of behavioral finance draw on what we know about us-normal people-including our wants, cognition, and emotions. And they draw on the roles of these factors in saving and spending, portfolio construction, returns we can expect from our investments, and whether we can hope to beat the market.

Meir Statman, a founder of behavioral finance, draws on his extensive research and the research of many others to build a unified structure of behavioral finance. Its foundation blocks include normal behavior, behavioral portfolio theory, behavioral life-cycle theory, behavioral asset pricing theory, and behavioral market efficiency.

• What Investors Really Want: Know What Drives Investor Behavior and Make Smarter Financial Decisions
• Personal Benchmark: Integrating Behavioral Finance and Investment Management
• A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Twelfth Edition)
• The Behavioral Investor
• A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Eleventh Edition)
• Your Complete Guide to a Successful & Secure Retirement
• A Crisis of Beliefs: Investor Psychology and Financial Fragility
• Probability and Statistics for Finance (Frank J. Fabozzi Series Book 176)
• The Laws of Wealth: Psychology and the secret to investing success