Behavioral Finance Articles
Reading Minds: Combining AAII’s Investor Pulse With BI’s Community Intelligence
October 2025 by Wayne A. Thorp, Doug Gerlach
AAII’s surveys historically reach extremes just before major market turning points, while BetterInvesting’s tools reveal what investment clubs are buying and the analytical thoughts of seasoned individual investors.
October 2025 by Wayne A. Thorp, Doug Gerlach
AAII’s surveys historically reach extremes just before major market turning points, while BetterInvesting’s tools reveal what investment clubs are buying and the analytical thoughts of seasoned individual investors.
Mind Over Money: Outsmarting Cognitive Biases in Retirement
July 2025 by Jenna Brashear
Even the most experienced investors and planners fall prey to invisible forces that can impact retirement decisions.
July 2025 by Jenna Brashear
Even the most experienced investors and planners fall prey to invisible forces that can impact retirement decisions.
The Put-Call Ratio: Viewing Market Sentiment Through Options Activity
June 2025 by Wayne A. Thorp
During periods of fear or euphoria, the CBOE equity put-call ratio can inform your judgment by showing where sentiment may have gone too far.
June 2025 by Wayne A. Thorp
During periods of fear or euphoria, the CBOE equity put-call ratio can inform your judgment by showing where sentiment may have gone too far.
How Fear and Overconfidence Directly Affect Market Behavior
March 2025 by Tudor Pop
Investor emotions cause asset mispricing, which leads to temporary market inefficiencies.
March 2025 by Tudor Pop
Investor emotions cause asset mispricing, which leads to temporary market inefficiencies.
Cognitive Decline Worsens Investors’ Returns
January 2025 by Omar Beirat
Cognitive decline and behavioral biases reduce the investment performance of older mutual fund investors, with middle-aged investors achieving the highest returns while older groups experience lower returns.
January 2025 by Omar Beirat
Cognitive decline and behavioral biases reduce the investment performance of older mutual fund investors, with middle-aged investors achieving the highest returns while older groups experience lower returns.
Shifting Control of Personal Finances With a Daily Money Manager
October 2024 by Charles Rotblut, Cynthia McLaughlin, Susie Marbury
How to choose the right professional when you or a loved one needs help with finances like bill paying.
October 2024 by Charles Rotblut, Cynthia McLaughlin, Susie Marbury
How to choose the right professional when you or a loved one needs help with finances like bill paying.
Six Lessons of Investment Loss to Keep You Winning
September 2024 by Andrew Stotz
Stories of investing loss that underscore the importance of preparation, vigilance and learning from others’ experiences.
September 2024 by Andrew Stotz
Stories of investing loss that underscore the importance of preparation, vigilance and learning from others’ experiences.
The Role of Financial Stability in Achieving Life Well-Being
August 2024 by Meir Statman
The financial domain has a special place among the domains of life well-being because it is important on its own and because it underlies all other domains.
August 2024 by Meir Statman
The financial domain has a special place among the domains of life well-being because it is important on its own and because it underlies all other domains.
Active Investors Can Still Win in “Efficient” Markets
June 2024 by Brian Haughey
To achieve above-average returns, investors need to be better at interpreting information than the average investor.
June 2024 by Brian Haughey
To achieve above-average returns, investors need to be better at interpreting information than the average investor.
Psychological Factors Strongly Influence the Timing of Social Security Benefits
June 2024 by Eunice Kim
Feelings of ownership and loss aversion drive many to claim their Social Security benefits early, despite the economic benefits of delaying claims to maximize payouts.
June 2024 by Eunice Kim
Feelings of ownership and loss aversion drive many to claim their Social Security benefits early, despite the economic benefits of delaying claims to maximize payouts.
Discipline and Diversification: Two Big Keys for Investor Success
May 2024 by Omar Beirat
Staying the course, especially during periods of volatility, leads to more favorable outcomes.
May 2024 by Omar Beirat
Staying the course, especially during periods of volatility, leads to more favorable outcomes.
Higher Emotional Intelligence May Lead to Better Investing Outcomes
May 2024 by Andrew Gomes
Developing emotional intelligence and being mindful of cognitive biases can help investors navigate the market more effectively and make better-informed decisions.
May 2024 by Andrew Gomes
Developing emotional intelligence and being mindful of cognitive biases can help investors navigate the market more effectively and make better-informed decisions.
How to Outsmart Your Investing Decisions
May 2024 by Anine Sus
The brain can have a hard time processing anything negative, but if you follow your rules-based investing strategy instead of your intuition, you will be rewarded over the long term.
May 2024 by Anine Sus
The brain can have a hard time processing anything negative, but if you follow your rules-based investing strategy instead of your intuition, you will be rewarded over the long term.
Winning the Battle Against Investment Fees and Biases
May 2024 by Paul Merriman
Arm yourself with the tools you need in the fight to keep as large a share as possible of your investment returns.
May 2024 by Paul Merriman
Arm yourself with the tools you need in the fight to keep as large a share as possible of your investment returns.
Design Your Portfolio With the Worst 2% of Times in Mind
August 2023 by William Bernstein
A “suboptimal portfolio” that you can tolerate is better than an “optimal” one that you can’t stick with.
August 2023 by William Bernstein
A “suboptimal portfolio” that you can tolerate is better than an “optimal” one that you can’t stick with.
Identifying the Personality Traits That Can Impact Investing Decisions
August 2023 by Charles Rotblut, Hongjun Yan
If someone knows that they have a strong tendency to be on the cautious side, they could benefit from investing slightly more aggressively than they otherwise would.
August 2023 by Charles Rotblut, Hongjun Yan
If someone knows that they have a strong tendency to be on the cautious side, they could benefit from investing slightly more aggressively than they otherwise would.
Filling Your Coffee Can Portfolio to Stash Away
June 2023 by Brian Haughey
Buying great companies and holding them forever has several advantages over other strategies, including pure indexing.
June 2023 by Brian Haughey
Buying great companies and holding them forever has several advantages over other strategies, including pure indexing.
The Importance of Filtering Out the Urge to Trade
January 2023 by Charles Rotblut, Bob Pisani
How one longtime market observer became a big believer in behavioral finance over the years.
January 2023 by Charles Rotblut, Bob Pisani
How one longtime market observer became a big believer in behavioral finance over the years.
Six Ways to Lessen the Pain of Contrarian Investing
August 2022 by John Deysher
The ability to be comfortable with being uncomfortable can help you keep your emotional and mental health in check.
August 2022 by John Deysher
The ability to be comfortable with being uncomfortable can help you keep your emotional and mental health in check.
Be a Wiser Investor Than the Crowd
March 2022 by Brian Haughey
If you hope to outperform you need to have some edge.
March 2022 by Brian Haughey
If you hope to outperform you need to have some edge.
Investors Show Bias Toward 52-Week Highs
December 2021 by Matthew Bajkowski
Stocks near their 52-week high price exhibit higher liquidity than stocks far from that price point.
December 2021 by Matthew Bajkowski
Stocks near their 52-week high price exhibit higher liquidity than stocks far from that price point.
How the World's Greatest Investors Think
May 2021 by William Green
Behaving differently and focusing on a simple idea with strict discipline are common threads that define investors who’ve become famous for their success.
May 2021 by William Green
Behaving differently and focusing on a simple idea with strict discipline are common threads that define investors who’ve become famous for their success.
Lessons From How Professionals Invest Their Money
April 2021 by Brian Portnoy
The personal money stories of advisers, portfolio managers and other financial experts can help you navigate your own financial journey.
April 2021 by Brian Portnoy
The personal money stories of advisers, portfolio managers and other financial experts can help you navigate your own financial journey.
Perception of Extreme Returns Depends on Experience
March 2021 by AAII Staff
The one-day returns an investor has previously experienced from any of the stocks they hold have a large effect on their selling behavior.
March 2021 by AAII Staff
The one-day returns an investor has previously experienced from any of the stocks they hold have a large effect on their selling behavior.
How Investors Can Overcome Emotional and Social Biases
May 2020 by H. Kent Baker, Vesa Puttonen
Though biases are ingrained in our emotional psyche, the really great investors follow strict investment disciplines to reduce the impact of their emotions.
May 2020 by H. Kent Baker, Vesa Puttonen
Though biases are ingrained in our emotional psyche, the really great investors follow strict investment disciplines to reduce the impact of their emotions.
The Major Behavioral Biases Influencing Your Investment Decisions
January 2020 by Jason Voss
Recognizing the major biases is the first step in learning how to avoid them in your investing.
January 2020 by Jason Voss
Recognizing the major biases is the first step in learning how to avoid them in your investing.
Steps You Can Take to Reduce the Risk of Behavioral Error
January 2019 by Charles Rotblut, Daniel Crosby
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.
January 2019 by Charles Rotblut, Daniel Crosby
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.
Learning From the Mistakes Made by Legendary Investors
October 2018 by Michael Batnick
Most of the errors made by the best-known investors are attributable to behavioral follies, including 10 common mistakes highlighted here.
October 2018 by Michael Batnick
Most of the errors made by the best-known investors are attributable to behavioral follies, including 10 common mistakes highlighted here.
Using the Power of the Written Word to Improve Your Returns
September 2018 by Charles Rotblut
Simple tools such as journals, checklists and rules can both make you more disciplined and help you to spot and avoid mistakes.
September 2018 by Charles Rotblut
Simple tools such as journals, checklists and rules can both make you more disciplined and help you to spot and avoid mistakes.
Grasshoppers and Ants in Retirement
June 2018 by Robert R. Johnson, Michael Finke, Tao Guo
Though Aesop’s fable is regarded as a lesson in thriftiness, “grasshoppers” are likelier to smooth their spending over their lifespans.
June 2018 by Robert R. Johnson, Michael Finke, Tao Guo
Though Aesop’s fable is regarded as a lesson in thriftiness, “grasshoppers” are likelier to smooth their spending over their lifespans.
Making Better and More Rational Decisions
June 2018 by Charles Rotblut, Annie Duke
Thinking about the various ways the future could play out can help you prepare for unfavorable outcomes and avoid irrational decisions.
June 2018 by Charles Rotblut, Annie Duke
Thinking about the various ways the future could play out can help you prepare for unfavorable outcomes and avoid irrational decisions.
Are You Spending Too Little in Retirement?
April 2018 by Meir Statman
While mental tools and self-control are useful when saving, in retirement, they can stop us from spending on ourselves and family.
April 2018 by Meir Statman
While mental tools and self-control are useful when saving, in retirement, they can stop us from spending on ourselves and family.
How Human Behavior Differs From Traditional Economic Models
December 2017 by Charles Rotblut, Richard Thaler
Economic models error by treating humans as making optimal choices when in reality supposedly irrelevant factors have a big impact.
December 2017 by Charles Rotblut, Richard Thaler
Economic models error by treating humans as making optimal choices when in reality supposedly irrelevant factors have a big impact.
The Dual Personalities of Investors
June 2017 by Chris White
Investors’ personalities often change from being balanced to a “dark zone” of greed, self-sacrifice and a sense of powerlessness.
June 2017 by Chris White
Investors’ personalities often change from being balanced to a “dark zone” of greed, self-sacrifice and a sense of powerlessness.
Overcoming Common Behavioral Errors
April 2017 by Meir Statman
Changing the context in which data is viewed and using good mental shortcuts can help lead to better decisions.
April 2017 by Meir Statman
Changing the context in which data is viewed and using good mental shortcuts can help lead to better decisions.
The Role Meditation Can Play in Investing
January 2017 by Jason Voss
Meditation helps investors by relieving stress, increasing mental functioning and overcoming behavioral biases.
January 2017 by Jason Voss
Meditation helps investors by relieving stress, increasing mental functioning and overcoming behavioral biases.
The Sound of Silence: Speaking to the Heart of Money Management
September 2016 by Sarah Newcomb
Discussing our attitudes toward money can result in healthier relationships and leave a better, lasting legacy with our heirs.
September 2016 by Sarah Newcomb
Discussing our attitudes toward money can result in healthier relationships and leave a better, lasting legacy with our heirs.
The Traits and Processes That Lead to Better Forecasts
September 2016 by Charles Rotblut, Philip Tetlock
Tetlock’s analysis of forecasting tournaments found that the best forecasters are open-minded and able to distinguish between many degrees of uncertainty.
September 2016 by Charles Rotblut, Philip Tetlock
Tetlock’s analysis of forecasting tournaments found that the best forecasters are open-minded and able to distinguish between many degrees of uncertainty.
Avoiding the Mistakes Made by Ineffective Investors
July 2016 by Spencer Jakab
Among the ways investors often hurt themselves are chasing after IPOs, reaching for yield and not understanding what they are buying.
July 2016 by Spencer Jakab
Among the ways investors often hurt themselves are chasing after IPOs, reaching for yield and not understanding what they are buying.
Defining Your Investment Philosophy
November 2015 by Ben Carlson
An investment philosophy can help you make better decisions. Ten questions for defining your own personal philosophy.
November 2015 by Ben Carlson
An investment philosophy can help you make better decisions. Ten questions for defining your own personal philosophy.
Investing Strategies for an Irrational Brain
October 2015 by Charles Rotblut
The human brain often does not make profit-maximizing decisions, but these actionable strategies can help avoid behavioral errors.
October 2015 by Charles Rotblut
The human brain often does not make profit-maximizing decisions, but these actionable strategies can help avoid behavioral errors.
Being a Contrarian Means Thinking Differently
July 2015 by Ken Fisher
Contrarians don’t take the opposite view of the consensus, but think differently, act independently and question assumptions.
July 2015 by Ken Fisher
Contrarians don’t take the opposite view of the consensus, but think differently, act independently and question assumptions.
Understanding Asset Bubbles and How to React to Them
June 2015 by Charles Rotblut, Robert Shiller
Bubbles are based on stories, and the stories always change. Nonetheless, diversification and common sense can help protect you.
June 2015 by Charles Rotblut, Robert Shiller
Bubbles are based on stories, and the stories always change. Nonetheless, diversification and common sense can help protect you.
Trading More Frequently Leads to Worse Returns
November 2014 by Charles Rotblut, Terrance Odean
The stocks investors buy, on average, underperform the ones they sell due to behavioral errors, such as overconfidence.
November 2014 by Charles Rotblut, Terrance Odean
The stocks investors buy, on average, underperform the ones they sell due to behavioral errors, such as overconfidence.
Driving Emotions From Your Investment Process: A 12-Step Program
September 2014 by Thomas Howard
These 12 steps, which include forgetting the price paid for an investment, can drive emotions out of your investment decision process.
September 2014 by Thomas Howard
These 12 steps, which include forgetting the price paid for an investment, can drive emotions out of your investment decision process.
The Case for Systematic Decision-Making
April 2014 by Wesley R. Gray
Though human expertise is needed to design models, models perform better than humans because they aren’t subject to behavioral biases.
April 2014 by Wesley R. Gray
Though human expertise is needed to design models, models perform better than humans because they aren’t subject to behavioral biases.
The Role of Luck and Skill in Investing
September 2013 by Charles Rotblut, Michael Mauboussin
Since luck plays a bigger role than skill in influencing investment returns, investors need to focus on their portfolio management process.
September 2013 by Charles Rotblut, Michael Mauboussin
Since luck plays a bigger role than skill in influencing investment returns, investors need to focus on their portfolio management process.
Five Steps for Gaining Control of Your Investments and Avoiding Mistakes
March 2013 by Carl Richards
Simple actions you can take now to focus on the things you can control and avoid making common investment mistakes.
March 2013 by Carl Richards
Simple actions you can take now to focus on the things you can control and avoid making common investment mistakes.
How Investors Miss Big Profits
October 2012 by Louis Harvey
Individual investors underperform the mutual funds they invest in, but they can take advantage of psychological behaviors to improve their returns.
October 2012 by Louis Harvey
Individual investors underperform the mutual funds they invest in, but they can take advantage of psychological behaviors to improve their returns.
Behavioral Errors Hurt Your Returns
July 2012 by Charles Rotblut, Daniel Kahneman
Individual investors hurt their performance by buying and selling too often, picking the wrong securities to trade, and being overconfident.
July 2012 by Charles Rotblut, Daniel Kahneman
Individual investors hurt their performance by buying and selling too often, picking the wrong securities to trade, and being overconfident.
The Good Investor Rule: Focus on How Not to Lose Money
July 2012 by Steven Sears
Many investors place on emphasis on making money, but successful investors focus more on how not to lose money.
July 2012 by Steven Sears
Many investors place on emphasis on making money, but successful investors focus more on how not to lose money.
Dishonesty, Choices and Investing
June 2012 by Charles Rotblut, Dan Ariely
The financial industry’s bad incentive structure leads to higher costs, but investors can counteract dishonesty simply by asking direct questions.
June 2012 by Charles Rotblut, Dan Ariely
The financial industry’s bad incentive structure leads to higher costs, but investors can counteract dishonesty simply by asking direct questions.
Updating Modern Portfolio Theory for Investor Behavior
April 2012 by Greg B. Davies, Arnaud de Servigny
The optimum portfolio is not only based on the expected risk and return of the investments, but considers an investor’s tolerance for risk.
April 2012 by Greg B. Davies, Arnaud de Servigny
The optimum portfolio is not only based on the expected risk and return of the investments, but considers an investor’s tolerance for risk.
Aging and Investing: The Risk of Cognitive Impairment
September 2011 by David Laibson
Cognitive impairment afflicts approximately half of all 80-year-olds. However, there are steps investors can take to protect themselves financially.
September 2011 by David Laibson
Cognitive impairment afflicts approximately half of all 80-year-olds. However, there are steps investors can take to protect themselves financially.
Managing the Mental Aspect of Investing
May 2011 by Meir Statman
Investors should consider whether they are being influenced by a good or bad herd behavior and who is on the other side of a trade.
May 2011 by Meir Statman
Investors should consider whether they are being influenced by a good or bad herd behavior and who is on the other side of a trade.
15 Short-Cuts and Biases That Lead to Bad Investment Decisions
May 2006 by Paul S. Szczygiel
Mental short-cuts simplify our complex world and help individuals form rules of thumb that work for many decisions. But they don’t work perfectly and can give rise to misperceptions that lead to decision-making errors. Worse, most people are unaware these biases exist. Fifteen common mental mistakes that lead to money-losing investment decisions.
May 2006 by Paul S. Szczygiel
Mental short-cuts simplify our complex world and help individuals form rules of thumb that work for many decisions. But they don’t work perfectly and can give rise to misperceptions that lead to decision-making errors. Worse, most people are unaware these biases exist. Fifteen common mental mistakes that lead to money-losing investment decisions.
Fund Investors' Biggest Mistakes and How You Can Avoid Them
May 2002 by Albert J. Fredman
Fund investors are not immune to mistakes, and fund managers can compound mistakes made by fund owners. One of the biggest mistakes is overconfidence, and the stock market is highly effective at deflating overblown egos.
May 2002 by Albert J. Fredman
Fund investors are not immune to mistakes, and fund managers can compound mistakes made by fund owners. One of the biggest mistakes is overconfidence, and the stock market is highly effective at deflating overblown egos.
A New Psychological Perspective on Investor Decision Making
September 1983 by Harvey A. Pines
Harvey Pines, Ph.D., discusses how social and emotional factors and judgemental biases influence decision-making, particularly in regard to investments.
September 1983 by Harvey A. Pines
Harvey Pines, Ph.D., discusses how social and emotional factors and judgemental biases influence decision-making, particularly in regard to investments.