This experimental paper investigates the impact of emotions on risk and return estimates of stocks. Participants rate well-known blue-chip firms on an emotional scale and forecast risk and return of the firms' stock. We find that positive emotions lead to a prediction of high return and low...

The topic of risk incorporates a variety of definitions within different fields such as psychology, sociology, finance, and engineering. In academic finance, the analysis of risk has two major perspectives known as standard (traditional) finance and behavioral finance. The central focus of...

This is a PDF file of 'Financial Behavior: The Psychology of Client Communications" presented at the Financial Planning Association (FPA) of Greater Indiana Chapter, November 2019 meeting.This presentation focused on how financial experts and their clients exhibit a wide array of behavioral...

Investors are inextricably linked to financial institutions, money managers, and the products they market. Mutual funds, exchange-traded funds (ETFs), hedge funds, and pension funds manage or hold roughly $55 trillion in combined wealth. This chapter examines these topics with a behavioral...

This chapter discusses personal financial planning, which is an interdisciplinary practice that employs a six-step process to develop integrated strategies for individuals and families to efficiently mobilize their human and financial capital to achieve their life goals. Financial planning draws...

The role of financial decision maker in a household has evolved over time. Decades ago, women held traditional roles of caregiver, housekeeper, and wife. Today, more women are pursuing higher education and female professionals and entrepreneurs are making great strides in business. Women are...

In recent decades, trading has become very popular among retail investors, mainly owing to widespread use of technology and a reduction in transaction costs. However, the growing information available to individuals and the higher complexity of financial markets have led investors to make...

A large body of behavioral finance literature focuses on the behavioral biases of individual investors in their trading choices. The research shows that sophistication is related to the level at which these behavioral biases influence investors' trading choices. This chapter reviews the...

This chapter discusses the role of speculation in the financial markets that influences individual and group behavior in the form of bubbles and crashes. The chapter highlights behavioral finance issues associated with bubbles, such as overconfidence, herding, group polarization, group-think...

This study examines the practical performance of the multiple priors optimal portfolio based on the mean-variance preference. The multiple priors optimal portfolio is designed to be robust to model uncertainty, also known as ambiguity. A back test finds two properties: the multiple priors...