Overview

Investment Decisions and Behavioral Finance is approved by the CFP Board of Standards for 15 credits.

“Top program by top academia and practitioners; Anyone interested in the "unknown and unknowable" of human behavior toward investing should attend. The reward is unlimited.”

- Alessia Falsarone, Vice President - Global Investments Analyst, Citigroup Global Wealth Management

2008 witnessed remarkable behavior in financial markets driven by the psychology of investors ranging from individuals with modest accounts to executives at financial giants. Major firms collapsed because they followed the herd, investing in instruments they could not understand, as they got swept up in a bubble. When the bubble got ruptured, individuals and big firms alike dumped their holdings because they were afraid that others would turn afraid. These reciprocating fears were realized, and prices for many securities fell well below underlying long-term values. Everyone who manages financial assets needs to understand how participants in financial markets actually behave, and how security prices respond to their behavior.

The Investment Decisions and Behavioral Finance program’s renowned faculty is comprised of major contributors to the field of behavioral finance, a revolutionary science for understanding otherwise confusing patterns within financial markets. The curriculum presents the latest research in the field, which gives significant insights into financial crises.

The psychology of investors, big and small, was the central element that explains the spectacular market collapse of late summer-fall 2008. Panic is a behavioral phenomenon. Similarly, the psychology of some of the most sophisticated executives in the financial realm led them into the decisions made over recent years that put their firms at risk.

Behavioral finance is a discipline whose central tenet is that psychological phenomena drive both individual decisions and market behavior. Its research is oriented to determining how and why market prices can deviate dramatically from long-term valuations. Any investor who wishes to gain insights into the forces that drove the prices of assets in recent years needs to understand the material addressed in Investment Decisions and Behavioral Finance. The curriculum provides information that helps to understand the past and contemplate the future.