top of page

Behaviorism

Behaviorism...

  • Is a subfield of psychology 

  • Focused on how emotions and biases can affect decisions

  • States that there are errors in decision-making

  • States that people are NOT rational

  • Explains why investment bubbles, volatility and drastic movements in the stock market occur

_edited.jpg

Why Should I Care?

  • Psychological biases may cause you to make irrational decisions

  • By knowing these traps, you may be able to avoid them

  • In order to make the best financial decisions, there has to be rationality involved

  • Knowing how to overcome these biases can prompt the making of better investing and financial decisions

ESSENTIAL READS
These are our must-read articles that we HIGHLY recommend will help you develop a strong foundation of behaviorism
MPT Meme.jpg
Modern Portfolio Theory (MPT) is a constructed theory that calculates one's maximum returns given their amount of risk they are willing to take.
 
This theory is key to Portfolio Shepherd.
READ MORE
What is Behavioral Finance Meme
Behavioral Finance is one of the key categories that we offer.
 
This new field analyzes how psychology affects decisions and subsequently, outcomes. 
READ MORE
Calculating Risk Using MPT Graph
When calculating returns according to the Modern Portfolio Theory, the understanding of the relationship between risk and return is critical
 
READ MORE
FOMO.jpg
The Fear of Missing Out (FOMO) is something we all experience due to our fears of being regretful. 
 
But why is it so detrimental?
​
READ MORE
EMH Meme
The Efficient Market Hypothesis (EMH) is a theory that states people are rational and that markets are efficient.
 
But are all people rational and are all markets efficient?
READ MORE
Herding Meme
​
Herding occurs when an individual, rather than using their own rational, follows a large group of people under the underlying assumption that others must be right. 
​
READ MORE
WANT TO DIVE DEEPER?
Want to test your knowledge and know more?
bottom of page