Quantitative investing

Behavioral finance

Behavioral finance delves into the psychological and sociological influences on investor behavior and its subsequent effects on financial markets.


Understanding this field is pivotal to grasping why markets might exhibit inefficiencies and why certain factor premiums, like momentum, emerge. A classic example of behavioral tendencies in finance is the herding instinct, seen prominently during market bubbles.


See also

Systematic approach Passive investing Unrewarded risks


Invisible layers surface to deliver attractive returns

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