Ideas

Introducing "The Behavioral Investor"

Today is a big day for me. Not only is it my birthday - the last of my 30s - it’s also the “birthday” of my new book, The Behavioral Investor. The Behavioral Investor is unique in that it takes a look at not just psychology, but also the physiological, sociological and neurological impediments on sound investment decision making. Here’s a bit more about it from my publisher, Harriman House:

From the New York Times bestselling author of the book named the best investment book of 2017 comes The Behavioral Investor, an applied look at how psychology ought to inform the art and science of investment management.

In The Behavioral Investor, psychologist and asset manager Dr. Daniel Crosby examines the sociological, neurological and psychological factors that influence our investment decisions and sets forth practical solutions for improving both returns and behavior. Readers will be treated to the most comprehensive examination of investor behavior to date and will leave with concrete solutions for refining decision-making processes, increasing self-awareness and constraining the fatal flaws to which most investors are prone.

The Behavioral Investor takes a sweeping tour of human nature before arriving at the specifics of portfolio construction, rooted in the belief that it is only as we come to a deep understanding of “why” that we are left with any clue as to “how” we ought to invest. The book is comprised of three parts, which are as follows:

- Part One – An explication of the sociological, neurological and physiological impediments to sound investment decision-making. Readers will leave with an improved understanding of how externalities impact choices in nearly imperceptible ways and begin to understand the impact of these pressures on investment selection.

- Part Two – Coverage of the four primary psychological tendencies that impact investment behavior. Although human behavior is undoubtedly complex, in an investment context our choices are largely driven by one of the four factors discussed herein. Readers will emerge with an improved understanding of their own behavior, increased humility and a lens through which to vet decisions of all types.

- Part Three – Illuminates the “so what” of Parts One and Two and provides a framework for managing wealth in a manner consistent with the realities of our contextual and behavioral shortcomings. Readers will leave with a deeper understanding of the psychological underpinnings of popular investment approaches such as value and momentum and appreciate why all types of successful investing have psychology at their core.

Wealth, truly considered, has at least as much to do with psychological as financial wellbeing. The Behavioral Investor aims to enrich readers in the most holistic sense of the word, leaving them with tools for compounding both wealth and knowledge.

I’m enormously proud of this work and I think that it will help you know yourself and grow your wealth.

Click here to learn more or order The Behavioral Investor and thank you for your support.

Three Easy Ways to Learn More About Behavioral Finance

I am what can only be called an evangelist when it comes to the importance of making the sometimes Ivory Tower concepts of behavioral finance more applicable in daily life. Simplifying complex psychological concepts is my professional purpose and I'm lucky to get to do something that I love (and that's so important) for a living. This year has been full of opportunities to live out this purpose and I wanted to make you aware of three simple ways that I have sought to educate advisors and investors in 2018:

1. On Your Best Behavior (video series) - OYBB is a collaboration between myself, Brinker Capital and InvestmentNews. We've created 40 (yes, FORTY) short, funny videos that highlight behavioral concepts in a quirky manner that makes them easy to digest. They are perfect for sharing with clients who might otherwise find such discussions tedious. You can watch the first ten episodes HERE.

2. Money, Mind and Meaning (podcast) - Not content to just consume podcasts (which I do, voraciously), I've decided to start my own, focused on the three things I love the most. Money, Mind and Meaning is an exploration of everything from cognitive bias to financial decision-making to the human condition more broadly. It has been enormously well received and well reviewed and I'd like to invite you to join the conversation HERE or HERE (if you're not an Apple fan).

3. Behavioral Finance Certificate Program (online CE course) - I have partnered with Greene Consulting and Keith van Etten to put the "applied" in applied behavioral finance. In this course, worth 15.5 CE credits (!!!), you will learn about a practical framework for applying behavioral coaching concepts. You can use the link HERE to request a demo and get a flavor for the style of the course. If BeFi is your thing, I think you'll enjoy this streamlined means of completing your continuing education requirements.

As a final announcement, I'll be spending the summer in Canada, partnering with ATB Financial to help bring the power of behavioral finance to our neighbors to the north. My family and I are excited about the change of scenery and the opportunity to work with such a fantastic organization. It is a real privilege to get paid to do work that is both intellectually stimulating and that positively impacts the world. To all who have watched my videos, bought my courses, read my books or listened to me speak, you have my sincere thanks.

Sincerely,

Daniel Crosby, Ph.D.

Money, Mind and Meaning Podcast: The Status Quo Bias

Money, Mind and Meaning is a podcast that explores how we can gain greater wealth and wisdom from a deeper understanding of our own behavior. In this, our 20th episode, we take on the challenge of the status quo bias and explore why making personal changes can be so hard. If you've ever wondered why you keep dating jerks or why you always order the same thing at dinner, you might want to give a listen. Thank you to all who have shared, rated and commented - it really helps!

Click HERE to listen!

Behavioral Finance Video: The Investor's Greatest Paradox

Investors are faced with a giant paradox:

1. We must invest in risk assets to survive.

2. We are psychologically ill-equipped to invest in risk assets.

Watch this short video to learn how we can begin to resolve this seeming contradiction and make sure that you subscribe via YouTube so as not to miss a single episode of, "On Your Best Behavior."