Behavioural Finance

Course Level

Introductory

Delegates

This course is designed for anyone trading or investing in financial markets – as well as others with an interest in the topic.

This following list is not restrictive, but the course is relevant for those working for asset management firms, financial advisers, commercial banks, investment banks and private banks. In terms of job function, the course is suitable for those working in the following areas: Management, advisory roles, front office – sales and trading, middle office, research, finance and risk.

Overview

This course will cover some of the main behavioural finance concepts. We examine psychological biases or heuristics and see how these may explain non-efficient market movements. We consider how traders and investors can control their own emotions, and avoid some of the classic mistakes.

Delegates who attend the course will leave with a solid understanding of the main behavioural finance concepts and how these are relevant to today’s financial markets. Delegates will better appreciate psychological biases (their own and others) and how these may explain non-efficient market movements. Those who manage money will be better equipped to control their own emotions, and avoid some of the classic mistakes made as a result of “irrational” decision making.

The instructor will run a number of exercises throughout the course with delegates working either independently or in small groups. The course does not assume any previous knowledge. Only a basic general knowledge of investment markets and products is assumed.

Learning outcomes include obtaining a greater understanding of:

2020/09 and other “black swans”: The evidence for behavioural finance and non-rational markets

• A random walk down Wall St. and the lure of the EMH, CAPM and other traditional models
• Some key practitioners and writers - and the evidence they present: Shiller, Taleb, Gladwell, Thaler
• Limits to arbitrage

Biases and heuristics, trying to control them

• Herding, anchoring and other human pre-dispositions
• Homo Economicus versus Homo Sapiens
• Structural and cultural factors that may lead to inefficient prices (bubbles and busts)
• Psychological factors that may lead to mispricing of securities
• Prospect theory – the work of Kahneman and Tversky

Implications for both fundamental and technical strategies

• Does TA already account for most behavioural issues?
• Measuring and modelling “sentiment”. Trend followers and contrarians
• Value investing
• Results and other announcements – how to respond to earnings surprises
• Implications for portfolio construction

"A CPD certificate of completion will be provided by BPP Professional Education Limited upon request, following attendance."

Course Dates

Location	Dates	Time	Availability
London	01 Dec 2020	9:00 AM - 5:00 PM	Spaces	Book Now