Background information on Behavioural Finance

Spontaneously, money and emotions have nothing to do with each other. However, if you look at people's money and investment behavior from a psychological point of view, emotions guide the mind and prompt action. Strategic investment planning is only possible if the psychological backgrounds in dealing with money and value investments are known and can be controlled. It is not for nothing that we believe in statements like: "Success knows no limits".

No success is permanent and infinite. Every trading has ups and downs - there is no such thing as a balance especially in trading with value and monetary investments. Responsible for this are the reactions of a market and the behavior of investors. Decisive desires of investors are profit and success. What has been experienced as success is burned into the memory and stimulates risk appetite. The knowledge of possible dangers in no way slows down the anticipation of profit. The positive experience stored in people's emotional memory is much faster in stimulus processing in the brain than any rational, learned aspect of optimal investment behavior. If there is no conscious and purposeful control of the emotional impulses, investors follow the irrational control of their brain and take actions that bring losses. Even the experience of loss can lead to further risky actions.

The knowledge of psychological control mechanisms is one aspect for a controlled and long-term successful "money management". Furthermore, knowledge of economic theories, chart analyses as well as psychological effects on the stock market are essential prerequisites. The masses also react depending on the triggers and thus provide again for movement on the investor market.

Trainings, workshops and lectures on the topic "Behavioral Finance" are conducted by the Management-Institut Dr. A. Kitzmann on request.

Author: Management-Institut Dr. A. Kitzmann

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