Behavioral Finance and Asset Allocation: Why the 'Perfect' Portfolio Doesn't Exist
After 20 chapters of learning about individual biases, Pompian finally gets to the big question: so what do you actually DO with all this knowledge?
Risk tolerance
Risk Profiling in Behavioral Finance
Chapter 10 of “Behavioral Finance for Private Banking” is where everything from the earlier chapters comes together. All the biases, prospect theory, loss aversion, mental accounting, it all converges here. Into one practical question: how do you figure out how much risk a client can actually handle?
Investment Personality Diagnostic Tests
This is a retelling of Chapter 5 (Diagnostic Tests for Investment Personality) from “Behavioral Finance for Private Banking” by Thorsten Hens, Enrico G. De Giorgi, and Kremena K. Bachmann (Wiley, 2018).
Cultural Differences in Investor Behavior
Traditional finance has this idea that money is the great equalizer. Doesn’t matter if you’re from Japan or Nigeria or Norway. We all want the same thing: good returns, low risk. Press a few buttons, buy some stocks, done.