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Personal finance

Winter 2001

Investment Madness: How Psychology Affects Your Investing and What to Do About It

In Investment Madness: How Psychology Affects Your Investing…and What to Do About It, John R. Nofsinger (’88 Elect. Engr., ’96 Ph.D. Fin.) debunks the accepted wisdom that people make rational investment decisions. They don’t. The book lays out the psychological biases and emotions that often trip up investors, impair their decisions, and consequently jeopardize their wealth.

Unlike other books on finances, this one “focuses on the reader—the investor, rather than on the stock market and investment strategy,” says the Washington State University assistant professor of finance.

While investors blame financial analysts and overhyped stocks for the depressed state of many nest eggs following the recent … » More …