Wen | Bank Screw (please get my authorization to reprint, and indicate the author and source)

Pay attention to WeChat official account: ten times as much as you earn after ten years of fixed investment

Weibo with the same name: @ Bank Screw

Hello, I am Bank Screw, and welcome to this issue of Screw to take you to study.

"Screws Take You to Read" has also accompanied you through dozens of issues, explaining many interesting and classic books and stories, such as "Being Rich Without Working", "How to Read a Book" and "Overcoming Procrastination".

We also introduced several investment masters in detail: Warren Buffett, his good partner Charlie Munger and John Borg, the father of index funds. They shared their life experiences, investment careers and investment ideas.

You can click on the link below to view some books with screws:

World Reading Day, 26 Books with screws

Starting from this issue, we will try a new reading method and share the contents of some good books.

In fact, the contents of some books are closely related to each other.

For example, it is also a book about Buffett. Snowball, which we shared before, introduces Buffett's life, and Buffett's letter to shareholders introduces Buffett's investment philosophy. The two books reflect each other and are better read together.

Interested friends, you can click this link to read related articles: Vacation Charging: Buffett's investment case Snowball Collection screws take you to read

For example, Charles Munger's Poor Charlie Collection and Li Lu's Civilization, Modernization, Value Investment and China have been shared before, which are also suitable for reading together.

Interested friends, you can click on the following link to view related articles:

Poor Charlie Collection: Buffett's Good Partner | Screw Takes You to Read

Talking about the emergence of the stock market from the origin of human beings | Screw Takes You to Read

This time, we will open a theme-based reading method and explain it around a theme, behavioral finance.

In fact, before this, we have shared some applications of behavioral finance.

Interested friends, you can click this link to view the related article: "Your behavior is affecting your investment income | screws take you to school".

Behavioral finance is so important.

It can be said that, in addition to the return of the investment variety itself, the behavior of investors determines your behavior and is affecting your investment return | Screw takes you to study | The final return of most investors is high or low.

For example, in the bull market in 215, many large-scale new equity funds were established in the market. But there is a very interesting situation:

Among the large-scale stock funds established at that time, the stock fund with the highest rate of return has the highest redemption rate of customers; Funds with low returns have a lower redemption ratio.

why is this happening?

this is quite different from what we usually know.

why?

The reason is what we introduced before: "disposition effect".

The so-called disposition effect is an investor who has already lost money, and always wants to sell it after returning to the capital. It has certain psychological obstacles to sell it at a loss, because there is a psychological effect of "loss aversion".

Therefore, many investors who are quilt cover will always want to untie the quilt before selling it; On the contrary, it is a fund that makes money. Without the psychological pressure of selling, the redemption rate is higher.

for fund companies, as long as customers have been holding funds, they can always collect management fees, regardless of whether customers are profitable or losing money.

Therefore, some fund companies, in order to sell more stock funds and collect more management fees, choose to make vigorous sales promotion when the bull market is at a high level.

After the big bull market, the stock market often falls sharply. Even if investors are trapped, there will still be many investors who choose to continue to hold loss-making stock funds because of "disposition effect".

In this way, the fund company can continue to collect management fees.

This is a typical application of behavioral finance.

Understanding the principles behind behavioral finance will help us make correct investment behaviors.

So what path should we follow to understand behavioral finance?

In fact, behavioral finance is the application of behavioral economics in the field of financial investment.

let's learn about behavioral economics first.

Screw has prepared three good books on behavioral economics for everyone this time.

Behavioral economics began to rise gradually after the bursting of the Internet bubble in 2.

These three books are developed along the works of several important economists in the history of behavioral economics.

Irrational Prosperity

The first book is Irrational Prosperity.

The author is also a heavyweight, and is the winner of the 213 Nobel Prize in Economics, robert shiller.

Irrational Prosperity explains the reasons for the formation of the Internet bubble in the late 199s.

Boosting

The second book is Boosting.

The author is also another famous master of behavioral economics, and the winner of the 217 Nobel Prize in Economics, Taylor.

Taylor is also a great musician. His research focuses on how behavioral economics can help people live a better life.

Thinking, Fast and Slow

The third book is Thinking, Fast and Slow.

The author is also a master of behavioral economics and winner of the 22 Nobel Prize in Economics, Kahneman.

The direction of Kahneman's research is to discover that when people make decisions, there are two different decision-making ways: subconscious and rational.

The three books have different research directions, but they are all good books on behavioral economics.

Next, screw will take you to study. According to the contents of these books and our investment, we will introduce how to apply the knowledge of behavioral finance in the process of investment.

Only by developing the correct investment behavior can we improve our investment income and live a better life.

Author: bank screws (please get my authorization to reprint, and indicate the author and source)

Video number, search for bank screws. At 8 o'clock every day, I will bring you a little investment knowledge.