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The Behavioral Investor

By Daniel Crosby

Hardback £25.00 / $35.00
eBook £19.00 / $26.49
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The Behavioral Investor

By Daniel Crosby

Jacket text

From the New York Times bestselling author of the book named the best investment book of 2017 comes The Behavioral Investor, an applied look at how psychology ought to inform the art and science of investment management.

In The Behavioral Investor, psychologist and asset manager Dr. Daniel Crosby examines the sociological, neurological and psychological factors that influence our investment decisions and sets forth practical solutions for improving both returns and behavior. Readers will be treated to the most comprehensive examination of investor behavior to date and will leave with concrete solutions for refining decision-making processes, increasing self-awareness and constraining the fatal flaws to which most investors are prone.

The Behavioral Investor takes a sweeping tour of human nature before arriving at the specifics of portfolio construction, rooted in the belief that it is only as we come to a deep understanding of “why” that we are left with any clue as to “how” we ought to invest. The book is comprised of three parts, which are as follows:

Part One – An explication of the sociological, neurological and physiological impediments to sound investment decision-making. Readers will leave with an improved understanding of how externalities impact choices in nearly imperceptible ways and begin to understand the impact of these pressures on investment selection.

Part Two – Coverage of the four primary psychological tendencies that impact investment behavior. Although human behavior is undoubtedly complex, in an investment context our choices are largely driven by one of the four factors discussed herein. Readers will emerge with an improved understanding of their own behavior, increased humility and a lens through which to vet decisions of all types.

Part Three – Illuminates the “so what” of Parts One and Two and provides a framework for managing wealth in a manner consistent with the realities of our contextual and behavioral shortcomings. Readers will leave with a deeper understanding of the psychological underpinnings of popular investment approaches such as value and momentum and appreciate why all types of successful investing have psychology at their core.

Wealth, truly considered, has at least as much to do with psychological as financial wellbeing. The Behavioral Investor aims to enrich readers in the most holistic sense of the word, leaving them with tools for compounding both wealth and knowledge.

About the author

Educated at Brigham Young and Emory Universities, Dr. Daniel Crosby is a psychologist, behavioral finance expert and asset manager who applies his study of market psychology to everything from financial product design to security selection. He is co-author of the New York Times bestseller Personal Benchmark: Integrating Behavioral Finance and Investment Management and founder of Nocturne Capital. He is at the forefront of behavioralising finance. His ideas have appeared in the Huffington Post and Risk Management Magazine, as well as his monthly columns for WealthManagement.com and Investment News.

Daniel was named one of the "12 Thinkers to Watch" by Monster.com, a "Financial Blogger You Should Be Reading" by AARP and in the "Top 40 Under 40" by Investment News.
When he is not consulting around market psychology, Daniel enjoys independent films, fanatically following St. Louis Cardinals baseball, and spending time with his wife and three children.

Reviews

For fans of behavioral finance Crosby’s book is a must to add to your collection. For neophytes it’s a great introduction.

Larry Swedroe, Author and Director of Research , The BAM Alliance

Rather arrogantly, I thought I knew everything there was to know about behavioural finance. After reading ‘The Behavioural Investor’ I realise I was wrong (ironically arrogance is one of the cognitive flaws that Dr Crosby writes about in his excellent book!).

Robert Carver, author ‘Smart Portfolios’ and visiting lecturer at Queen Mary, University of London

…Crosby is a master of his craft, a great storyteller as well as an academic, who can explain sometimes difficult concepts in simple terms and support his arguments with thought-provoking and entertaining commentary.

Richard Gill, CFA and contributor to Master Investor

Crosby’s book is eminently readable, with ample stories and studies…the book offers the reader valuable lessons in creating a portfolio that can, at least in part, circumvent the most pervasive behavioral pitfalls.

Brenda Jubin, Reading the Markets blog

…a useful summary of an increasingly important field of investing. Our brains have not evolved fast enough to make us expert in many investment decisions, and being aware of these short-comings may help us, not to knock it out of the park as investors, but to avoid various more obvious mistakes that can often hurt our wealth.

Simon Moore, Chief Investment Officer at Moola and contributor to Forbes

‘The Behavioral Investor’ is Daniel Crosby’s brilliant new book which looks at how professional investors can improve and enhance their performance by better understanding the way their brains influence their behaviours and affects their investment practice.

Steven Goldstein, Senior Managing Director, Alpha R Cubed

Media coverage

From CityWire Americas:

Mark Twain once said that all you need are ‘good friends, good books and a sleepy conscience.’ Our top 30 ensure you have at least one of those checked off with their must-reads.

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From Top Traders Round Table:

Welcome to Top Traders Round Table, a podcast series on managed futures brought to you by CME Group. On today’s episode, host Niels Kaastrup-Larsen continues his conversation with Dr. Daniel Crosby, Chief Behavior Officer of Brinker Capital, and the host of The Standard Deviation Podcast. Niels and Daniel discuss how emotion affects investment decision-making, the… Read more »

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From Seeking Alpha:

Investing for the next 10 years and beyond can sound like a daunting task. The longer your time horizon, the less you are likely to be able to predict accurately what the future may hold. You must think probabilistically to make sure the odds are in your favor. Tasks with a significant degree of luck… Read more »

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From Coffee and Capital:

Since the beginning of the year I’ve committed myself to cracking open a book or listening to an audiobook every single day. Whether it’s during the commute to and from work, before I start my day, at work as part of my studies for a licensing exam, or at night when I get home, I… Read more »

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From Seeking Alpha:

As I often do, when I go on vacation, I will take at least one book suggested to me by one of my members. And, on my recent pilgrimage to the House Of Mouse, I brought along the book “The Behavioral Investor,” written by Daniel Crosby. While I do not necessarily agree with everything I… Read more »

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From MoneyWeek:

The Behavioral Investor by Daniel Crosby (2018) I enjoyed this book on behavioural investing a lot (Crosby is a US author, hence the US spelling), and not just because it covers similar ground to my own book The Sceptical Investor. Crosby knows his stuff – he’s a proper psychologist as well as an asset manager… Read more »

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From Bamford Media:

The Behavioral Investor, by Dr Daniel Crosby The most successful Financial Planners of the future will combine financial planning, investment management, and behavioural coaching. Understanding the reasons why, as humans, we’re terrible when it comes to making financial decisions is an essential component for your tool kit. In The Behavioral Investor, Dan examines the sociological,… Read more »

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From The Money Panel:

So today we are welcoming Dr. Daniel Crosby, who is a psychologist and a behavioural finance expert who helps organisations to really understand the mind and the financial markets. In Daniel’s second book he talks about his 10 Laws of Wealth and this then feeds into him talking about the investment management side of things.… Read more »

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From Advisor Perspectives:

I recently provided a baker’s dozen list of my favorite books on behavioral finance. Having just finished reading Daniel Crosby’s The Behavioral Investor (available from the Amazon link on this page), my list of favorites has now expanded to 14. Behavioral finance is the study of human behavior and how it leads to investment errors,… Read more »

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From The Art of Manliness Podcast:

When it comes to investing, your brain can be your best friend or your worst enemy. My guest today explains how, and what you can do to ensure your brain is a staunch ally in your quest for financial security. His name is Daniel Crosby, he’s a psychologist, behavioral finance expert, and the author of… Read more »

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From Between Now and Success:

On my latest podcast, Sterling Shea and I had a fascinating riff on this idea of hospitality as differentiated from simply providing “excellent service.” As a financial advisor, we can do everything right. We can put a technically accurate plan together. We can create a historically tested asset allocation plan. We can answer the phone… Read more »

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From ETF.com:

P.S. I just finished reading Daniel Crosby’s “The Behavioral Investor,” which I highly recommend. You can find my list of the best baker’s dozen of behavioral finance books here.

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From Guru Focus:

You don’t need to read 10,000 pages before you can get your feet wet. But there are some general topic areas you do want to have some familiarity with. (…) Process: Daniel Crosby’s “Behavioral Investor” is great. It has helpful synopses at the end of each chapter.

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From US News:

“The Laws of Wealth: Psychology and the Secret to Investing Success” by Daniel Crosby Psychologist and behavioral finance expert Daniel Crosby is the man you want guiding you through investors’ heads. Trained as a clinical psychologist, Crosby has applied his behavioral insights to his work as an asset manager and as a best-selling author. In… Read more »

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From INC.:

13. The Behavioral Investor by Daniel Crosby “The next great frontier in entrepreneurial evolution isn’t likely to come from advances in technology or data collection. It’s likely to come from something far more mundane — improvements in human behavior. The budding field of applied behavioral finance has profound implications for the decision making of every… Read more »

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From PR News Wire:

Crosby is at the forefront of behavioralizing finance and has published several bestselling books that serve as guides to building strong advisor-client engagement, including You’re Not that Great (2012), Personal Benchmark: Integrating Behavioral Finance and Investment Management (2014), The Laws of Wealth (2016), and The Behavioral Investor (2018). He earned his bachelor and doctoral degrees… Read more »

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From The Vox Markets Podcast:

On the Vox Markets Podcast Today: 6th March 2019 Dr Daniel Crosby, New York Times bestselling author of the, “The Laws of Wealth” and now “The Behavioral Investor”, discusses his work and in particular how investing is largely a mind game.

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From Keen on Retirement:

When Dr. Daniel Crosby was in his 20s, he had a fateful conversation with his father about what he should do for a living. Dr. Crosby’s father was a financial advisor, but young Daniel didn’t think finance was a good fit for his interests and skill set. “I remember saying to him, ‘Dad, but I’m… Read more »

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From Your Money, Your Wealth:

Behavioral finance expert Dr. Daniel Crosby talks about his latest book, The Behavioral Investor and cracks us up with stories of how “having to go” and other physiological, sociological, and psychological factors influence our investing choices. Plus, Joe and Big Al answer money questions about ACA subsidies and Roth conversions, strategies for reducing the tax… Read more »

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From Standard Deviations:

Daniel was in town recently, and gave me a few copies of his most recent book, The Behavioral Investor to share. If you would like a copy, reply to this email. I’ll draw three names and send copies out. The book is educational, but not in a boring, textbook way. It teaches through reader self-assessments… Read more »

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From Investment Innovation Institute:

In his new book The Behavioral Investor published late last year, Daniel Crosby says that for a premium to be broad and persistent an investor needs to feel a certain amount of pain to hold positions for any length of time. “For [a premium] to be enduring, I think there needs to be a behavioural… Read more »

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From Market Brothers Media:

3. The Behavioral Investor (Daniel Crosby) Dr. Daniel Crosby has a Ph.D. in psychology and he flaunts it, by going above and beyond the performance of investors and portfolio managers and delving into the minds and philosophies that it takes to set the individual investor on a path to financial freedom. The Behavioral Investor attacks… Read more »

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From Abnormal Returns:

The Behavioral Investor, Daniel Crosby (@danielcrosby) not only helps understand the basis for our actions but how to live our investing lives with these biases in mind. Daniel is the Chief Behavioral Officer at Brinker Capital. He previously authored The Laws of Wealth. You can also hear more from Daniel on his podcast Standard Deviations.… Read more »

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From The American Asociation of Individual Investors:

Following a systematic, rules-based approach and automating your process to the extent possible is the easiest way to manage your emotions and use the tendency to adhere to the status quo to your advantage. Psychologist and behavioral finance expert Daniel Crosby, Ph.D., and I recently spoke about the types of behavioral risk investors face and… Read more »

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From Master Investor:

Along those lines The Behavioral Investor is the latest effort from finance psychologist and wealth manager Daniel Crosby, with the book having the ambitious aim of being the most comprehensive guide to the psychology of asset management ever written. It begins by delving into the mysteries if human nature, key to the underlying mechanisms of… Read more »

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From The Irrelevant Investor:

Steve Mnuchin’s bizarre statement on the health of the banks, huge swings in the market from day-to-day, the causes of the market downturn, can we really blame the algos for increased volatility, is technology speeding up market cycles, stock millennials bought in 2018, performance for Ivy endowments in 2018, our review of the new Sandra… Read more »

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From ETF Trends:

For this week’s interview, we are going to take an in depth look at behavior in investing, how it hurts us, and what can potentially be done about it. My guest is psychologist Dr. Daniel Crosby. Daniel is the author of three books on Behavioral Finance, including the recent best seller The Behavioral Investor. He… Read more »

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From What Investment:

The area of behaviourial investing has grown in relevance and importance since the global financial crisis of 2008 and this book is one of the best to have been published in this period.

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From Technical Analysis of STOCKS & COMMODITIES The Traders’ Magazine since 1982:

This New York Times bestselling author offers The Behavioral Investor, an applied look at how psychology should inform the art and science of investment management.

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From Money Week:

If you’ve ever followed the ups and downs of the stockmarket you’ll know that markets and individual investors don’t always act rationally. Indeed, sometimes their behaviour can be completely irrational. Daniel Crosby tries to explain why.

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From All About Your Benjamins:

Podcast with Dr Dan Crosby talking about his new book

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From Reading The Markets:

In 2014 Daniel Crosby, a psychologist and asset manager, co-authored the bestselling Personal Benchmark: Integrating Behavioral Finance and Investment Management and followed that up in 2016 with The Laws of Wealth. Another two years and he’s produced a new book: The Behavioral Investor (Harriman House, 2018). His “admittedly audacious” goal is for this book “to… Read more »

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From Meaningful Money podcast:

Listen to Pete Matthew talk to Dan Crosby about his new book

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From So Money podcast:

Listen to Dan Crosby talk about his new book

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From Forbes.com:

By understanding some of the latest behavioral investing research, you may improve your investment performance. However, it’s not quite as simple as you may think. In his new book, aptly titled The Behavioral Investor, Dr Daniel Crosby, reviews the field of behavioral investing, consolidating many studies to present a holistic view of an important area… Read more »

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From MarketWatch:

Behavioral finance is sometimes mistakenly seen as a vehicle for ridding investors of their pesky emotions and irrational quirks en route to them becoming something like the Homo Economicus that economists long imagined them to be. If we could just rid ourselves of irrationality, the thought goes, we would make perfect financial decisions. The only… Read more »

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From Living with Money:

Listen to Daniel Crosby talk about his new book

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From Think Advisor:

His new book, “The Behavioral Investor” (Harriman House-Oct. 16, 2018) follows Crosby’s New York Times bestseller, “Personal Benchmark” (2014), co-authored with Charles Widger. In the interview, Crosby, 38, focuses on a theme that can best be described by the opening verse to Paul Simon’s classic, “Feelin’ Groovy” (aka “The 59th Street Bridge Song”): “Slow down,… Read more »

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From Santa Fe New Mexican:

I recently interviewed Daniel Crosby, a psychologist who specializes in behavioural finance… Crosby is not appealing to greed when he points out the advantages of investing in stocks over the long haul.

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Contents

Foreword by Noreen D. Beaman
Preface

Part One. The Behavioral Investor
Chapter 1. Sociology
Chapter 2. Investing on the Brain
Chapter 3. Physiology

Part Two. Investor Psychology
Chapter 4. Ego
Chapter 5. Conservatism
Chapter 6. Attention
Chapter 7. Emotion

Part Three. Becoming a Behavioral Investor
Chapter 8. The Behavioral Investor Overcomes Ego
Chapter 9. The Behavioral Investor Conquers Conservatism
Chapter 10. The Behavioral Investor Hones Attention
Chapter 11. The Behavioral Investor Manages Emotion

Part Four. Building Behavioral Portfolios
Chapter 12. Investing a Third Way
Chapter 13. Behavioral Investing is Rules-Based
Chapter 14. Behavioral Investing is Risk First Investing
Chapter 15. Behavioral Investing has No Masters of the Universe
Chapter 16. Sample Behavioral Investment Factors

Epilogue. Endure to the End



Published: 16/10/2018
Edition: 1st
Pages: 280
Formats: hardback - ISBN 9780857196866
ebook - ISBN 9780857196873
Media enquiries

If you’d like to get in touch with the author for interview or comment, or you’d like a review copy of this book, please contact us at pr@harriman-house.com or call +44 (0)1730 233870.

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