Behavioral Finance Not To Be Ignored

One of the pillars of modern portfolio theory is the efficient market hypothesis (EMH), a theoretical framework for understanding how securities are valued in the marketplace. According to the EMH, the market is composed of well-informed and rational investors simultaneously making decisions that drive assets to their true value. Competing theories and volumes of research suggest, however, that the

One of the pillars of modern portfolio theory is the efficient market hypothesis (EMH), a theoretical framework for understanding how securities are valued in the marketplace. According to the EMH, the market is composed of well-informed and rational investors simultaneously making decisions that drive assets to their true value.

Competing theories and volumes of research suggest, however, that the market is driven by other forces as well — among them, the irrational behavior of inves

All access premium subscription

Your subscription will include 12 months of Trusts & Estates magazine and access to premium content on WealthManagement.com.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish