Final Thoughts on Behavioral Finance and Investor Types
So we made it through all 15 chapters of Behavioral Finance and Investor Types by Michael M. Pompian. Here’s what I think about the whole thing.
Money management
Investment Advice for Every Investor Type - Behavioral Finance Chapter 15
This is it. Chapter 15 of Behavioral Finance and Investor Types by Michael M. Pompian is where everything comes together. All those chapters about biases, personality types, asset classes, and financial planning? They were building up to this. The final chapter answers the obvious question: okay, I know my investor type, now what do I actually do with my portfolio?
Why You Need a Financial Plan Before Investing - Behavioral Finance Chapter 14
Chapter 14 of Behavioral Finance and Investor Types by Michael M. Pompian takes a step back from psychology and biases. Instead it asks a very basic question: do you actually have a plan? Not an investment strategy. Not a stock pick. A plan. Because financial planning and investing are not the same thing, and a lot of people confuse the two.
What Is Asset Allocation and Why It Matters Most - Behavioral Finance Chapter 13
Chapter 13 of Behavioral Finance and Investor Types by Michael M. Pompian is about the single most important investment decision you will ever make. Not which stocks to buy. Not when to buy them. It is about how you split your money across different types of investments. That is asset allocation.
Bonds, Hedge Funds, and Building a Portfolio - Behavioral Finance Chapter 12 Part 2
Part 1 covered stocks and the basics of asset classes. Now in the second half of Chapter 12 of Behavioral Finance and Investor Types, Michael Pompian walks through the rest of the investment universe: bonds, hedge funds, real assets, and finally how to put them all together into a portfolio.
Stocks and Asset Classes Explained Simply - Behavioral Finance Chapter 12 Part 1
Up to this point in Behavioral Finance and Investor Types, Michael Pompian has been talking about psychology, biases, and investor personalities. Chapter 12 switches gears. Now he lays out what you can actually invest in. Because knowing your own biases is great, but at some point you need to understand the tools on the table.
The Accumulator Investor Type Explained - Behavioral Finance Chapter 11
If the Preserver is the cautious tortoise and the Follower goes with the crowd, the Accumulator is the person at the poker table who shoves all in and stares you down while doing it. Chapter 11 of Behavioral Finance and Investor Types by Michael M. Pompian introduces the most aggressive of the four behavioral investor types.
The Independent Investor Type Explained - Behavioral Finance Chapter 10
Chapter 10 of Behavioral Finance and Investor Types by Michael M. Pompian introduces the Independent. If the Follower from the last chapter was the passenger, the Independent is the person who insists on driving. And reading the map. And ignoring the GPS because they “know a shortcut.”
The Follower Investor Type Explained - Behavioral Finance Chapter 9
Chapter 9 of Behavioral Finance and Investor Types by Michael M. Pompian introduces the Follower. And honestly, this one probably describes more people than any other type in the book.
The Preserver Investor Type Explained - Behavioral Finance Chapter 8
Chapter 8 of Behavioral Finance and Investor Types by Michael M. Pompian introduces the first of the Behavioral Investor Types: the Preserver. And honestly, if you’ve ever been too scared to invest your savings because “what if the market crashes tomorrow,” this chapter is about you.
Find Your Investor Type With These Quizzes - Behavioral Finance Chapter 7
Chapter 7 of Behavioral Finance and Investor Types by Michael M. Pompian is where theory finally meets practice. After six chapters of background, frameworks, and definitions, you actually get to take the quizzes and figure out what type of investor you are. Two quizzes, to be specific.
The Four Investor Types Framework Explained - Behavioral Finance Chapter 6
Chapter 6 of Behavioral Finance and Investor Types by Michael M. Pompian is where it all comes together. After two chapters on personality theory and personality testing, Pompian finally introduces the thing the whole book is building toward: his Behavioral Investor Type (BIT) framework.
The Building Blocks of Bad Money Decisions - Behavioral Finance Chapter 3
Chapter 3 of Behavioral Finance and Investor Types by Michael M. Pompian is where the real meat starts. This is the catalog of all the ways your brain sabotages your investing. Pompian calls them “the building blocks” and splits them into two big groups: cognitive biases and emotional biases.
What Is Behavioral Finance Anyway? - Behavioral Finance Chapter 2
Chapter 2 of Behavioral Finance and Investor Types by Michael M. Pompian opens with a quote I really like. Meir Statman from Santa Clara University said: “People in standard finance are rational. People in behavioral finance are normal.” That pretty much sums up the whole chapter.
Why Reaching Financial Goals Is So Hard - Behavioral Finance Chapter 1
Chapter 1 of Behavioral Finance and Investor Types by Michael M. Pompian opens with a Picasso quote: “I’d like to live as a poor man, with lots of money.” That pretty much sets the tone. We all want financial success, but something keeps getting in the way. And that something is usually us.
Behavioral Finance and Investor Types - Why Your Brain Is Bad With Money
So I just finished reading this book called Behavioral Finance and Investor Types by Michael M. Pompian. And honestly? It messed with my head a little. In a good way.