Expert's View 名家觀點


二月 1 , 2020  

Behavioral Finance and the Personal Investor


by Charles Cheng, CFA



It’s been 50 years since Daniel Kahneman and Amos Tversky published Prospect Theory, which is considered the founding theory of behavioral economics and behavioral finance. In the intervening decades, their ideas have been expanded upon in subsequent studies, earning themselves and others a total three Nobel prizes in economics directly related to behavioral work. Most of the attention and academic impact of these studies are for challenging the assumptions of classical economics, particularly the notion that humans act rationally with respect to economic matters. However, understanding some of the studies and conclusions of these researchers can also make you a better investor. Below are some of the common behaviors that may hinder your investing decisions.

丹尼爾·卡尼曼(Daniel Kahneman)和阿莫斯·特維爾斯基(Amos Tversky)出版的《展望理論》已有50年了,該理論被認為是行為經濟學和行為財務學的基礎理論。在隨後的幾十年中,他們的想法在隨後的研究中進一步擴展,使自己和他人共獲得了與行為工作直接相關的三項諾貝爾經濟學獎。這些研究的大部分注意力和學術影響力都在挑戰古典經濟學的假設,特別是關於人類在經濟事務上採取理性行動的觀念。但是,了解這些研究人員的一些研究和結論也可以使您成為更好的投資者。以下是一些可能會妨礙您進行投資決策的常見行為。



Loss Aversion



Loss Aversion is the tendency for people to prefer avoiding losses over making equivalent gains and is a key component of prospect theory.



Prospect Theory



For risky choices leading to gains, people tend to be more risk averse than for risky choices to try to avoid losses.



Endowment Effect



The Endowment Effect is the tendency for people to value something that they already possess over acquiring the same object when they don’t own it.



Regret Avoidance



People often will choose not to take action in order to minimize the possibility of regret. Sunk costs are a form of regret avoidance.


All of these behaviors lead to actions that are significantly harmful to successful investing. Such actions include:



-Holding losing positions in hopes that one won’t actually have to take a loss.

-Not executing an investment allocation because one missed out on a slightly more favorable price.

-Avoiding looking at and taking actions on investments when the market moves against one’s -previous investment decisions.

-Changing your investment rationales to avoid taking action when something doesn’t go as expected







Investors who are prone to these actions tend to be underinvested for most of the cycle and most highly exposed when the trend reverses. In order to prevent this from happening, it is important to reflect on your own behaviors and act against these impulses.




Mr. Cheng is a managing partner at a Hong Kong based independent private investment office. This article reflects his personal views and not his firm’s and should not be viewed as an investment recommendation.