This chapter focuses on the financial mindset and behaviors of Millennials, and how they interact with financial advisors. Millennials have surpassed Baby Boomers as the productive generation and are projected to be the wealthiest. At 80 million strong, millennials are poised to leave their...

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...

This chapter examines the phenomenon of frequent stock trading. Specifically, it covers the ample research demonstrating the negative effects of frequent trading on investor returns, as well as several possible underlying causes for this irrational behavior. Possible causes of frequent trading...

This chapter takes an economic view of the investment behavior of high net worth individuals (HNWIs), including: the psychological aspects of private wealth and the practice of wealth management, the current trends affecting the players and markets, and empirical findings on wealth creation and...

In the oversight of most funds, the portfolio manager holds the key decision-making power. Often regarded as foundational to the investment process, a few select managers can attract billions of dollars from investors, giving the managers increased prominence, credibility, and compensation....

The term “financial psychopath” was coined after the financial crisis of 2007−2008. Intended as a term of derision, the media used it to negatively label financial professionals, rather than to draw a clinical profile. The expression succinctly conveys the widespread post−2008 public...

Financial analysts are important players in the marketplace. Analysts' reports, which include forecasts of earnings and stock recommendations, move market prices. Investors, both large and small, rely on the information in reports when forming their investment decisions. Given the relevance of...

An increasing number of households use financial planners or advisors. This chapter provides insight into these professionals, their potential motivations, and their interactions with clients. The various regulatory regimes of financial planners and advisors are discussed, including the most...

This chapter assesses the behavior of corporate managers and boards of directors within the framework of agency theory, stewardship theory, and psychological biases. In agency theory, a chief executive officer (CEO) is motivated to act in his or her own best interests rather than those of...