Summary of Beyond Greed and Fear:Understanding Behavioral Finance and the Psychology of Investing

Published in 2000, Hersh Shefrin's Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing is an exploration of how traditional financial theory fails to account for factors related to human irrationality and emotion. Shefrin examines the impact of emotions on financial decisions and explores how the prospect of gain and loss affects behavior. He focuses on elements that might lead investors to make choices that are not in their own best interests, and issues in psychological motivation. Shefrin also takes into consideration how psychology affects trading strategies, portfolio management, and mutual funds. Through combining traditional accountancy principles with the findings of psychology, Shefrin presents an entirely new perspective on financial decision making.