The Behavioral Investor

This book, being the conjunction of finance and psychology, was a very interesting read. Lucky for me, you don’t need to be an expert in either to appreciate this book, as the author succinctly incudes the important aspects of both topics without being weighted down by unnecessary conclusions. He applies psychological studies that at first appear purely academic but in fact are intimately related to how humans interact with the financial environment we have created.

Some concepts were familiar to me, but seeing them through the eyes of a trained psychologist has molded my perspective to allow a deeper understanding of why these concepts are perpetuated in the first place. And while obviously not a panacea to “becoming a successful investor”, it has definitely given me insight into my own behavior and how that translates to my investing habits. We are organisms fine tuned for hunting-gathering, and these instincts can run opposite to the healthy habits necessary for investing.

I’m not sure that I’ll re-read this in the future, but Crosby includes many intriguing references in this book that I may turn to next, and I imagine that I will be reading more of his works.