Inside the Investor’s Brain

Unique insights into how the mind of an investor operates and how developing emotional awareness leads to long-term success

Inside the Investor’s Brain provides readers with specific techniques for understanding their financial psychology, so that they can improve their own performance and learn how to outsmart other investors. Chapter by chapter, author Richard Peterson addresses various mental traps and how they play a role in investing. Through examples, such as a gambling experiment with playing cards, the author shows readers how being aware of the subconscious can separate the smart investors from the average ones. This book also contains descriptions of the work of neuroscientists, financial practitioners, and psychologists, offering an expert’s view into the mind of the market. Innovative and accessible, Inside the Investor’s Brain gives investors the tools they need to better understand how emotions and mental biases affect the way they manage money and react to market moves.

Table of Contents

Part I: Foundations

Chapter 1: Markets on the Mind

Chapter 2: Brain Basics

Chapter 3: Origins of Mind

Chapter 4: Neurochemistry

Part II: Feelings and Finances

Chapter 5: Intuition

Chapter 6: Money Emotions

Chapter 7: Excitement and Greed

Chapter 8: Overconfidence and Hubris

Chapter 9: Anxiety, Fear, and Nervousness

Chapter 10: Stress and Burnout

Chapter 11: Love of Risk

Chapter 12: Personality Factors

Part Ill: Thinking about Money

Chapter 13: Making Decisions

Chapter 14: Framing Your Options

Chapter 15: Loss Aversion

Chapter 16: Time Discounting

Chapter 17: Herding

Chapter 18: Charting and Data Mining

Chapter 19: Attention and Memory

Chapter 20: Age, Sex, and Culture

Part IV: In Practice

Chapter 21: Emotion Management

Chapter 22: Change Techniques

Chapter 23: Behavioral Finance Investing

About the Author

Richard L. Peterson MD works at the intersection of mind and markets. As CEO of the MarketPsych group of companies (www.marketpsych.com) he directs a team incorporating psychological insights to improve individual investment decisions (MarketPsych), develop market-beating investment strategies (MarketPsy Capital LLC), provide the global standard in media sentiment data (MarketPsych Data LLC), and strengthen client relationships (MarketPsych Insights LLC).

Called “Wall Street’s Top Psychiatrist” (Associated Press), his financial psychology research has been published in leading academic journals, textbooks, and profiled in the financial media including NPR, CNBC, the Wall Street Journal, the Financial Times, and the BBC. His book, “Inside the Investor’s Brain” (Wiley, 2007), was praised as “outstanding” and a “seminal text” by Barrons. With Frank Murtha PhD he co-authored “MarketPsych: How to Manage Fear and Build Your Investor Identity” (Wiley, 2010). Both books were named top financial books of their respective years by Kiplinger’s. His new book “Trading on Sentiment” was published in March 2016 and is slated to be released in Chinese and Japanese in coming months.

Dr. Peterson earned cum laude degrees in electrical engineering, arts, and medicine (MD) from the University of Texas, performed post-graduate neuroeconomics research at Stanford University, and is Board-certified in psychiatry. He lives in California with his family.