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Arzu Ozoguz
Investors tend to be their own worst enemies. In this third course, you will learn how to capitalize on understanding behavioral biases and irrational behavior in financial markets. You will start by learning about the various behavioral biases – mistakes that investors make and understand their reasons. You will learn how to recognize your own mistakes as well as others’ and understand how these mistakes can affect investment decisions and financial markets. You will also explore how different preferences and investment horizons impact the optimal asset allocation choice.
Read more
Investors tend to be their own worst enemies. In this third course, you will learn how to capitalize on understanding behavioral biases and irrational behavior in financial markets. You will start by learning about the various behavioral biases – mistakes that investors make and understand their reasons. You will learn how to recognize your own mistakes as well as others’ and understand how these mistakes can affect investment decisions and financial markets. You will also explore how different preferences and investment horizons impact the optimal asset allocation choice.
Read more
Investors tend to be their own worst enemies. In this third course, you will learn how to capitalize on understanding behavioral biases and irrational behavior in financial markets. You will start by learning about the various behavioral biases – mistakes that investors make and understand their reasons. You will learn how to recognize your own mistakes as well as others’ and understand how these mistakes can affect investment decisions and financial markets. You will also explore how different preferences and investment horizons impact the optimal asset allocation choice.
After this course, you will be more effective in overcoming biases to do the wrong things at the wrong times and tailoring an investment strategy that is best suited on your or your client’s profile and investment needs.
Register for this course and see more details by visiting:
OpenCourser.com/course/qxgca6/biases
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Syllabus
Efficient markets hypothesis and limits of arbitrage
This module introduces the third course in the Investment and Portfolio Management Specialization. In this module, we first present the efficient market hypothesis (EMH) – another pillar idea of modern finance. You will learn about its rationale as well as the empirical evidence that supports and challenges the predictions of the EMH such as anomalies. Finally, we will consider why smart money may sometimes fail to exploit away anomalies in financial markets.
Read more
Syllabus
Efficient markets hypothesis and limits of arbitrage
This module introduces the third course in the Investment and Portfolio Management Specialization. In this module, we first present the efficient market hypothesis (EMH) – another pillar idea of modern finance. You will learn about its rationale as well as the empirical evidence that supports and challenges the predictions of the EMH such as anomalies. Finally, we will consider why smart money may sometimes fail to exploit away anomalies in financial markets.
Read more
Biases and realistic preferences
In this module, we review the behavioral critique of market rationality. In contrast to the presumption that investors are rational, behavioral finance starts with the assumption that they are not. We will examine some of the information-processing and behavioral biases uncovered by psychologists in several contexts. In addition, we will consider alternative, more realistic ways of describing investor preferences.
Inefficient markets
In this module, we review a number of puzzles related to the aggregate stock market and the cross-section of average stock returns that have been documented in the literature. We examine how the behavioral biases and tendencies discussed in the previous module might result in some of these puzzles observed in financial markets.
Applications: Investor behavior
In this last brief module, we turn our attention to the behavior of individual investors and review the empirical evidence on how behavioral biases and tendencies we discussed in the previous modules affect individual investor portfolio choice and trading decisions.
Good to know
Good to know
Know what's good ,
what to watch for , and
possible dealbreakers
Ideal for investors and students of behavioral finance who want to develop strategies that capitalize on biases and irrational behavior in markets
Led by Arzu Ozoguz, an instructor with expertise in behavioral finance and investment management
Provides a comprehensive understanding of behavioral biases and their impact on investment decisions
Examines the efficient market hypothesis and its limitations, offering a critical perspective on market rationality
Emphasizes the importance of overcoming biases to make sound investment choices
Requires no prerequisite knowledge, making it suitable for beginners and those with varying backgrounds in finance
Save this course
Save Biases and Portfolio Selection to your list so you can find it easily later:
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Reviews summary
Well received portfolio course
According to students, this course on biases and portfolio selection is of high quality. Learners say that the course material is thorough and makes the subject matter interesting. One student notes that it is their favourite course
Activities
Be better prepared
before
your course. Deepen your understanding
during
and
after
it. Supplement your coursework and achieve mastery of the topics covered
in Biases and Portfolio Selection with these
activities:
Review efficient markets hypothesis
Show steps
Revisiting the efficient markets hypothesis will help build a strong foundation for understanding the course material.
Show steps
-
Read the course syllabus and skim the first module.
-
Review your notes or textbooks from previous finance courses.
-
Complete any assigned readings or online quizzes on the efficient markets hypothesis.
Organize and review course materials
Show steps
Organizing and reviewing course materials will help you stay on track and improve your understanding of the course content.
Show steps
-
Download and organize lecture slides, notes, and assignments.
-
Review the materials regularly to reinforce your learning.
-
Create a study schedule and stick to it.
Create a mind map of behavioral biases
Show steps
Creating a mind map of behavioral biases will help you visualize and understand the different types of biases discussed in the course.
Browse courses on
Behavioral Biases
Show steps
-
Brainstorm a list of behavioral biases discussed in the course.
-
Organize the biases into categories or groups.
-
Use a mind mapping tool or software to create a visual representation of the biases and their relationships.
Five other activities
Expand to see all activities and additional details
Show all eight activities
Solve practice problems on behavioral finance
Show steps
Solving practice problems will help you apply the concepts of behavioral finance to real-world scenarios.
Browse courses on
Behavioral Finance
Show steps
-
Find online practice problems or quizzes on behavioral finance.
-
Work through the problems and check your answers.
-
Review the solutions and identify areas where you need to improve.
Discuss case studies of investment biases
Show steps
Discussing case studies of investment biases with peers will allow you to learn from others' experiences and perspectives.
Browse courses on
Case Studies
Show steps
-
Find a study group or online forum where you can discuss investment biases.
-
Present a case study of an investment bias to the group.
-
Lead a discussion on the causes, consequences, and potential solutions related to the bias.
Develop an investment strategy based on behavioral biases
Show steps
Developing an investment strategy that takes into account behavioral biases will help you make more informed and rational investment decisions.
Browse courses on
Investment Strategy
Show steps
-
Research and identify your own behavioral biases.
-
Develop an investment strategy that minimizes the impact of these biases.
-
Create a written document or presentation outlining your investment strategy.
Review 'Thinking, Fast and Slow' by Daniel Kahneman
Show steps
This book provides insights into the two systems of thinking that influence our behavior, which can help you understand and overcome behavioral biases in investing.
View
Noise: A Flaw in Human Judgment
on Amazon
Show steps
-
Read the book and take notes on the key concepts.
-
Identify examples of how these concepts apply to investing.
-
Discuss the book with a friend or colleague.
Attend a workshop on behavioral finance
Show steps
Attending a workshop on behavioral finance will allow you to learn from experts and network with other professionals in the field.
Browse courses on
Behavioral Finance
Show steps
-
Research and find a relevant workshop.
-
Register for the workshop.
-
Attend the workshop and take notes.
Review efficient markets hypothesis
Show steps
Revisiting the efficient markets hypothesis will help build a strong foundation for understanding the course material.
Show steps
Show steps
Show steps
- Read the course syllabus and skim the first module.
- Review your notes or textbooks from previous finance courses.
- Complete any assigned readings or online quizzes on the efficient markets hypothesis.
Organize and review course materials
Show steps
Organizing and reviewing course materials will help you stay on track and improve your understanding of the course content.
Show steps
Show steps
Show steps
- Download and organize lecture slides, notes, and assignments.
- Review the materials regularly to reinforce your learning.
- Create a study schedule and stick to it.
Create a mind map of behavioral biases
Show steps
Creating a mind map of behavioral biases will help you visualize and understand the different types of biases discussed in the course.
Browse courses on
Behavioral Biases
Show steps
Show steps
Show steps
- Brainstorm a list of behavioral biases discussed in the course.
- Organize the biases into categories or groups.
- Use a mind mapping tool or software to create a visual representation of the biases and their relationships.
Five other activities
Expand to see all activities and additional details
Show all eight activities
Solve practice problems on behavioral finance
Show steps
Solving practice problems will help you apply the concepts of behavioral finance to real-world scenarios.
Browse courses on
Behavioral Finance
Show steps
Show steps
Show steps
- Find online practice problems or quizzes on behavioral finance.
- Work through the problems and check your answers.
- Review the solutions and identify areas where you need to improve.
Discuss case studies of investment biases
Show steps
Discussing case studies of investment biases with peers will allow you to learn from others' experiences and perspectives.
Browse courses on
Case Studies
Show steps
Show steps
Show steps
- Find a study group or online forum where you can discuss investment biases.
- Present a case study of an investment bias to the group.
- Lead a discussion on the causes, consequences, and potential solutions related to the bias.
Develop an investment strategy based on behavioral biases
Show steps
Developing an investment strategy that takes into account behavioral biases will help you make more informed and rational investment decisions.
Browse courses on
Investment Strategy
Show steps
Show steps
Show steps
- Research and identify your own behavioral biases.
- Develop an investment strategy that minimizes the impact of these biases.
- Create a written document or presentation outlining your investment strategy.
Review 'Thinking, Fast and Slow' by Daniel Kahneman
Show steps
This book provides insights into the two systems of thinking that influence our behavior, which can help you understand and overcome behavioral biases in investing.
View
Noise: A Flaw in Human Judgment
on Amazon
Show steps
Show steps
Show steps
- Read the book and take notes on the key concepts.
- Identify examples of how these concepts apply to investing.
- Discuss the book with a friend or colleague.
Attend a workshop on behavioral finance
Show steps
Attending a workshop on behavioral finance will allow you to learn from experts and network with other professionals in the field.
Browse courses on
Behavioral Finance
Show steps
Show steps
Show steps
- Research and find a relevant workshop.
- Register for the workshop.
- Attend the workshop and take notes.
Career center
Learners who complete Biases and Portfolio Selection will develop knowledge and skills
that may be useful to these careers:
Behavioral Economist
Behavioral Economist
A Behavioral Economist studies how psychological factors influence economic decisions. This course may be useful as it provides a strong foundation in behavioral finance, which is a closely related field. This knowledge can help Behavioral Economists better understand how people make economic decisions and develop policies that are more effective.
Professor
Professor
A Professor teaches and conducts research in a specific academic discipline. This course may be useful as it provides a strong foundation in behavioral finance, which is a growing field. This knowledge can help Professors stay up-to-date on the latest research and teach their students about this important topic.
Investment Analyst
Investment Analyst
An Investment Analyst researches and studies financial data, economic conditions, and business trends. They provide recommendations and advice to clients, and may manage portfolios. This course may be useful as it provides a strong foundation in behavioral finance, which can help Investment Analysts understand how investors make decisions and how this can affect financial markets. This knowledge can help Investment Analysts make better investment recommendations and achieve better results for their clients.
Portfolio Manager
Portfolio Manager
A Portfolio Manager manages investment portfolios for individuals and institutions. This course may be useful as it provides a strong foundation in behavioral finance, which can help Portfolio Managers understand how investors make decisions and how this can affect financial markets. This knowledge can help Portfolio Managers make better investment decisions and achieve better results for their clients.
Risk Manager
Risk Manager
A Risk Manager identifies and assesses risks, and develops and implements strategies to mitigate those risks. This course may be useful as it provides a strong foundation in behavioral finance, which can help Risk Managers understand how investors make decisions and how this can affect financial markets. This knowledge can help Risk Managers make better risk management decisions and protect their organizations from financial losses.
Investment Manager
Investment Manager
An Investment Manager oversees and manages investment portfolios for individuals and institutions. This course may be helpful as it provides a strong foundation in behavioral finance, which can help Investment Managers understand how investors make decisions and how this can affect financial markets. This knowledge can help Investment Managers make better investment decisions and achieve better results for their clients.
Financial Planner
Financial Planner
A Financial Planner helps individuals and families plan for their financial future. This course may be useful as it provides a foundation in behavioral finance, which can help Financial Planners understand how investors make decisions and how this can affect financial markets. This knowledge can help Financial Planners better serve their clients and tailor financial plans that are more likely to meet their clients' needs.
Data Scientist
Data Scientist
A Data Scientist analyzes and interprets data to identify patterns and trends. This course may be useful as it provides a foundation in behavioral finance, which can help Data Scientists better understand how investors make decisions and how this can affect financial markets. This knowledge can help Data Scientists develop more effective data-driven models and algorithms.
Financial Advisor
Financial Advisor
A Financial Advisor helps clients make informed financial decisions, such as how to save for retirement or invest for the future. This course may be helpful to Financial Advisors as it provides a deeper understanding of behavioral biases and how they can impact investment decisions. This knowledge can help Advisors better serve their clients and tailor investment strategies that are more likely to meet their clients' needs.
Actuary
Actuary
An Actuary uses mathematical and statistical techniques to assess risk and uncertainty. This course may be useful as it provides a foundation in behavioral finance, which can help Actuaries better understand how investors make decisions and how this can affect financial markets. This knowledge can help Actuaries make better risk assessments and develop more effective strategies for mitigating risk.
Financial Analyst
Financial Analyst
A Financial Analyst researches and studies financial data, economic conditions, and business trends. They provide recommendations and advice to clients, and may manage portfolios. This course may be useful as it provides a foundation in behavioral finance, which can help Financial Analysts understand how investors make decisions and how this can affect financial markets.
Financial Consultant
Financial Consultant
A Financial Consultant provides advice to individuals and businesses on financial matters, such as investing, saving, and retirement planning. This course may be useful as it provides a foundation in behavioral finance, which can help Financial Consultants understand how investors make decisions and how this can affect financial markets. This knowledge can help Financial Consultants provide better advice to their clients.
Compliance Officer
Compliance Officer
A Compliance Officer ensures that a company complies with all applicable laws and regulations. This course may be useful as it provides a foundation in behavioral finance, which can help Compliance Officers understand how investors make decisions and how this can affect financial markets. This knowledge can help Compliance Officers better understand the risks associated with financial markets and ensure that their companies are compliant with all regulations.
Economist
Economist
An Economist analyzes and interprets data to understand the economy and make predictions about its future performance. This course may be useful as it provides a foundation in behavioral finance, which can help Economists understand how investors make decisions and how this can affect financial markets.
Analyst
Analyst
An Analyst researches and studies financial data, economic conditions, and business trends. They provide recommendations and advice to clients, and may manage portfolios. This course may be useful as it provides a foundation in behavioral finance, which can help Analysts understand how investors make decisions and how this can affect financial markets.
For more career information including salaries, visit:
OpenCourser.com/course/qxgca6/biases
Reading list
We've selected 17 books
that we think will supplement your
learning. Use these to
develop background knowledge, enrich your coursework, and gain a
deeper understanding of the topics covered in
Biases and Portfolio Selection.
A comprehensive and scholarly overview of behavioral finance, this book valuable resource for academics and researchers in the field. It covers the latest research on behavioral biases and their implications for investors.
Save
This widely used textbook comprehensive overview of behavioral finance, providing deep coverage of behavioral biases and their effects at both the individual and market level. The book includes worked examples and case studies, and valuable additional reference either for supplemental reading or as a substitute for the course.
Save
A Nobel Prize-winning book that explores two systems of thinking: fast, intuitive thinking and slow, deliberate thinking. provides deep insights into the psychology of decision-making and valuable read for anyone interested in behavioral finance.
A personal finance book that explores the psychology of money and how it affects our financial decisions. is written in a clear and engaging style and provides valuable insights into the behavioral biases that can lead to poor financial choices.
A comprehensive guide to security analysis, this book valuable reference for investors who want to learn more about the fundamental analysis of stocks.
A quantitative approach to financial decision-making, this book provides a strong theoretical foundation for understanding behavioral biases and their implications for investors.
Save
A popular book on behavioral biases and their effects on personal finance. Written by a prominent behavioral economist, this book is accessible to a general audience and provides interesting and often entertaining examples of irrational behavior.
A concise and accessible guide to behavioral finance, this book good starting point for those who are new to the field. It covers the key behavioral biases and their implications for investors.
A classic investment book that provides a value investing framework. is commonly used as a textbook in academic institutions and valuable reference for investors of all levels.
Explores how we can use insights from behavioral economics to design systems that help people make better decisions.
Provides a fascinating look at the irrational ways that we make decisions, and how we can overcome these biases.
This comprehensive textbook provides a detailed overview of security analysis and valuable reference for any investor.
This authoritative guide provides a comprehensive overview of fixed income securities and valuable reference for any investor or financial professional.
Offers a comprehensive guide to exchange-traded funds (ETFs). It valuable resource for anyone who is interested in using ETFs in their investment portfolio.
Offers a comprehensive guide to currency trading. It valuable resource for anyone who wants to learn more about this asset class.
Offers a comprehensive guide to technical analysis. It valuable resource for anyone who wants to learn more about this trading technique.
Offers a comprehensive guide to candlestick charting. It valuable resource for anyone who wants to learn more about this technical analysis technique.
For more information about how these books relate to this course, visit:
OpenCourser.com/course/qxgca6/biases
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4 weeks of study
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Institution
Rice University
Instructor
Arzu Ozoguz
Language
English
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This course belongs to a
collection
called
Investment and Portfolio Management. It's comprised of five courses:
- Biases and Portfolio Selection (viewing)
- Capstone: Build a Winning Investment Portfolio
- Portfolio Selection and Risk Management
- Global Financial Markets and Instruments
- Investment Strategies and Portfolio Analysis
Good to know
Ideal for investors and students of behavioral finance who want to develop strategies that capitalize on biases and irrational behavior in markets
Led by Arzu Ozoguz, an instructor with expertise in behavioral finance and investment management
Provides a comprehensive understanding of behavioral biases and their impact on investment decisions
Examines the efficient market hypothesis and its limitations, offering a critical perspective on market rationality
Emphasizes the importance of overcoming biases to make sound investment choices
Requires no prerequisite knowledge, making it suitable for beginners and those with varying backgrounds in finance
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