Behavioral Finance

Objective
The Behavioral Finance training course offers a different, eye-opening view of investment practice. It equips participants with a structural framework for analyzing how human and social, cognitive and emotional factors impact financial behavior and financial markets. Participants will acquire a series of skills for identifying specific psychological phenomena and the manner in which these phenomena apply to your own financial decisions and those of others.

Key benefits
By attending this program, you will:

• Learn how psychological hard wiring predisposes people to make systematic mistakes about risk
• Recognize the psychological basis for irrational exuberance, irrational pessimism, animal spirits, and black swan effects in financial markets
• Distinguish between conditions in which investors are prone to overreact or underreact to market events
• Identify the errors and biases to which financial analysts are especially vulnerable
• Apply psychological theories of risk taking to analyze how individual investors behave
• Reduce your own vulnerabilities to making suboptimal judgments and inferior financial decisions

Special note
For participants to fully appreciate this program, extensive advance preparation is necessary and it is advisable to enroll at least 2 weeks prior to the start date. Preparation includes extensive pre-reading materials and the completion of a questionnaire regarding participant's attitudes toward risk, saving, and investment. The results of this questionnaire form the core of the program and participants should allow several hours for its completion.

Laptop required
Laptop computers, equipped with Microsoft Excel, are required for this program. It is necessary that participants bring their own laptop, or if requested, a laptop can be provided at an additional charge.

Day 1
Psychological Foundations of Under- and Overreaction

• Main psychological phenomena that influence how investors react to new information
• Contrasting the approaches of behavioral asset pricing and traditional asset pricing
• Discussion of academic literature documenting overreaction and underreaction, and associated debate with efficient market school
• Discussion of the equity premium puzzle, irrational exuberance, and irrational pessimism

Day 2
Biases in Forecasts of Earnings, Returns, and Risk

• Biases in earnings forecasts and analyst recommendations
• Biases in forecasts of strategists
• Biases in forecasts of risk and return

Day 3
Psychological Influences on Individual Investors

• Psychological foundations of framing effects
• Framing effects, asset pricing, and psychological factors that differentiate outperformers from underperformers
• Behavioral portfolios: the factors that drive the behavior of individual investors

The Behavioral Finance training course is highly recommended for investment professionals and will also benefit analysts, bankers, plan sponsors, consultants and financial advisors.

Amsterdam Institute of Finance is registered with CFA Institute as an Approved Provider of continuing education programs. This program is eligible for 18 CE credit hours as granted by CFA Institute. If you are a CFA Institute member, CE credit for your attendance at this event will be automatically recorded in your CE Diary.

“One of the best programs I have ever taken. I will definitely recommend this program.”
Head of Strategic Asset Allocation,
Folksam
Sweden

"Many of the ‘traits’ raised have the potential to improve performance as a person and as a professional in the investment industry."
Quantitative Research Analyst
Thrivent Asset Management
USA

“Necessary to better understand the world of finance.”
Executive Vice President, Financial Investments and Corporate Development
Orkla, ASA
Norway

"It focuses on the ‘soft part’ of our business, but that part makes a lot of the difference."
Equity Sales
SEB Enskilda
Sweden