Behavioural Finance

Behavioural Finance

Course Description

Introduction

Welcome to the Behavioural Finance course, presented by Cambridge for Global Training. This course explores the intersection of psychology and finance, providing participants with insights into how human behaviour influences financial decision-making. By understanding the psychological biases and heuristics that affect investment choices, participants will learn to make more informed decisions and improve financial outcomes.

Course Objectives

By the end of the course, participants will be able to:

• Understand the principles of behavioural finance and its relevance to investment and financial decision-making.
• Identify common behavioural biases and heuristics that can lead to irrational investment decisions.
• Analyse the impact of emotions, cognitive biases, and social influences on financial behaviour.
• Develop strategies to overcome behavioural biases and make more rational investment decisions.
• Apply behavioural finance concepts to portfolio management, risk management, and asset pricing.
• Explore the implications of behavioural finance for financial regulation and policy-making.
• Foster a disciplined and rational approach to investing and financial planning.

Who Should Attend

• Investment Professionals
• Financial Advisors
• Portfolio Managers
• Risk Managers
• Traders
• Wealth Managers
• Anyone interested in understanding the psychology of financial decision-making

Course Outline

Unit 1: Introduction to Behavioural Finance

• Overview of behavioural finance and its evolution
• Traditional finance vs. behavioural finance
• Key concepts: bounded rationality, heuristics, and biases
• Prospect theory and its implications for decision-making
• Historical examples of behavioural biases in financial markets

Unit 2: Cognitive Biases and Heuristics

• Anchoring and adjustment
• Confirmation bias
• Overconfidence
• Loss aversion
• Availability heuristic

Unit 3: Emotional Influences on Financial Decisions

• Fear and greed in investment behaviour
• Regret aversion
• Herding behaviour and the impact of social influence
• Emotional biases in market bubbles and crashes
• Techniques for managing emotions in investing

Unit 4: Practical Applications of Behavioural Finance

• Behavioural portfolio theory
• Behavioural biases in investment management
• Risk perception and risk management strategies
• Market anomalies and anomalies-based trading strategies
• Behavioural finance in financial planning and wealth management

Unit 5: Behavioural Finance and Policy Implications

• The role of regulation in addressing behavioural biases
• Nudging and choice architecture in financial decision-making
• Investor education and its impact on financial behaviour
• Ethical considerations in applying behavioural finance principles
• Future trends and developments in behavioural finance research