Financial Habits and Behaviours

How can we make better financial decisions?
Rating: 4.2 out of 5 (248 ratings)
7,050 students
Financial Habits and Behaviours
Rating: 4.2 out of 5 (248 ratings)
7,050 students
Make better investment choices
Understand Behavioural Finance

Requirements

  • Some investing experience
Description

Our brains are hard wired to take mental short cuts when we encounter complex activities such as managing our personal finance because we cannot handle and analyze the volume of information in front of us.

As a result, we make decisions based on part of the information available, rather than all the pieces needed to make the right decision.

There is one common assumption we often pride ourselves as rational when dealing with money related decision making. This assumption is false as researchers are able to explain that we are not rational and our “non-rational” behaviour falls into patterns and is somewhat predictable i.e. we are predictably normal individuals and are subject to make predictable cognitive mistakes.

Behavioural finance, a research based discipline, offers a better understanding of these “non rational behaviour” or mental short cut or behavioural biases that are ingrained in our human decision-making processes. It studies the psychology of financial decision-making that includes studies on how emotions such as greed and fear can affect investment decisions and stock markets; the role of mental shortcuts or biases in decision making, such as the use of simple rules of thumb for making complex investment decisions. In other words, behavioural finance takes the insights
of psychological research and applies them to financial decision making situations such as how investors become overconfident with respect to making gains and oversensitive to losses.

With some working knowledge of Behavioural Finance, we can avoid painful situations and be more effective in “staying the course” in our financial journey as well as can improve our overall investment experience by doing things that reduce our anxiety.


Who this course is for:
  • Anyone who wants to learn about Behavioural Finance
Course content
3 sections • 10 lectures • 45m total length
  • Introduction
    01:04
  • Our Brain
    02:58
  • Mental Short Cuts
    03:28
  • What Is Behavioural Finance?
    03:00
  • Overconfidence
    04:17
  • Loss Aversion
    03:19
  • Disposition and Regret
    04:23
  • Information Processing
    18:11
  • Herding
    01:58
  • Conclusion and Summary
    02:50

Instructors
Unbiased Financial Education Courses
Institute for Financial Literacy
  • 4.1 Instructor Rating
  • 8,700 Reviews
  • 115,868 Students
  • 26 Courses

  The Institute for Financial Literacy is a collaboration between MoneySense and Singapore Polytechnic Enterprise. 

    Our financial education courses cover basic money management, financial planning and investment know-how. 

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  • 4.2 Instructor Rating
  • 248 Reviews
  • 7,050 Students
  • 1 Course