Your Everyday Guide to Behavioural Finance

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Author: Dr Nirakar Pradhan, Ph.D, CFA, FRM, Prakash Praharaj, M.Com (Gold Medalist), CAIIB, CFPCM Category: Business & Economics ISBN: 9789391067663 Binding: Paperback Dimensions: 8.5 x 5.5 inch Number of Pages: 236

Since the start of the 20th century, India’s GDP has been growing at an average of 6-7 per cent and the World Bank predicts India to become one of the fastest growing major economies in the world. The lack of social security benefits for the common citizen coupled with favourable factors like structural reforms, young population, high rates of savings and consumption, and waves of digitalisation and financialisation are driving both domestic and global investors to the Indian capital market in pursuit of higher risk-adjusted return.
But with the increasing globalisation and rising volatility, the common investors often fall prey to their personal biases (fear, greed, overconfidence, loss aversion, etc.). This behaviour is at variance with traditional finance which holds that the investors are rational and markets are efficient. The overload of investment tips flowing from television, print, social media, conferences, and investment gurus further adds to investor confusion.

Prakash Praharaj and Nirakar Pradhan, two well-known investment advisors, have come together to document their decades-long learnings and practical experience into a very useful, comprehensive volume. Your Everyday Guide to Behavioural Finance sheds light on the theory of behavioural finance and nineteen dominant behavioural biases in an accessible and easy-to-understand manner. It offers a framework for identifying, assessing, and managing one’s own behavioural traits (biases) to enhance investment success. The book also recommends Behaviourally Modified Asset Allocation (BMAA), a tool to synchronise the investment portfolio with the life cycle of the investors.

So, whether you are a financial advisor, portfolio manager, or an individual investor yourself, Your Everyday Guide to Behavioural Finance will provide you with an integrated perspective to craft efficient and effective investment strategies irrespective of external market noises.

Reviews

‘A must read for those interested in the art and science of investment and wealth management by integrating traditional finance with behavioural finance, life cycle with investment cycle, and financial and non-financial wealth.’
– Vijay Sonawane, Director and CEO, Jay Capital Ltd, London

‘The book provides integrated perspectives on physical, social, and emotional treasures besides the financial wealth. The valuable and practical insights in the book can make investing life simpler, richer, and more enjoyable.’
– Dr Poonam Tandon, Chief investment officer, IndiaFirst Life Insurance Company

‘. . . [The book] provides simple and practical advice for understanding common biases and avoiding errors in financial decision making, thus leading investors to long term investment success.’
– Navneet Munot, Managing director and chief executive officer, HDFC Asset Management Company Limited