Wall Street Psychology

Feature story on behavioral finance and how the psychology of it affects individual and institutional investors in today's economy.

For Immediate Release 
Contact: Matt Heintz (cell: 913-269-5757)
email: mheintz@cypresspublishing.com 
Cypress Publishing Group
 11835 Roe # 187, Leawood, KS 66211             
 913-681-9875   800-284-7328

Psyched Out Over Wall Street
 
            Bill Conner, a retired accountant in San Leandro, California, drops a stack of envelopes labeled Merrill Lynch, Fidelity and Charles Schwab onto his desk and gazes at them as if they were letters from an ex-spouse.
 
It can be a little more than frustrating at times when you think youre doing everything right," said Conner.  Conner says he has been on an investment roller coaster since the beginning of his ventures into the stock market. 
 
Like most Americans who have seen their retirement security evaporate, Conner struggles to understand why bear markets exist in a time of seemingly economic prosperity. 
 
            Psychological knowledge is at least as important as financial knowledge in succeeding in the stock market. A lot of economic and financial theory is based on the notion that individuals act rationally and consider all information in the decision-making process. Surprisingly, there is a lot of evidence to support that this is not always the case," said Bernard Murstein, psychologist and author of Getting Psyched for Wall Street."
 
People often ignore the psychological aspects of the market. They think about what rationally ought to be instead of what people are thinking and feeling, or what actually is. Although I believe that individuals can learn to behave rationally, it requires a knowledge of what is going on in the market and a knowledge of the different cognitive and personality factors," said Murstein. Getting Psyched for Wall Street deals with the psychological issues that everyone should be aware of in the field of investments and finance."
 
Murstein asserts that one of the reasons analysts make mistakes is because they form definite opinions as to what is correct and incorrect. He says they are slow to change their perceptions when new evidence presents itself because the new data challenges the perception of themselves as knowledgeable." Murstein attributes this to overconfidence. Overconfidence, he says can be both beneficial and debilitating financially, as well as psychologically.
 
‘Getting Psyched for Wall Street talks about the psychology of people in charge of millions to billions of dollars. Most of these people tend to be pretty confident in their decision-making skills. This, combined with more information and resources than ever before, leads managers to overtrade, in the belief that they can beat the market," said Murstein.
 
Also, most new financial advisors at big firms have a little more than three months to prove themselves, and not meeting the expectations of clients and bosses can be more than just stressful, it can mean their job.
 
 To most people, being in a group offers security. Following the herd" in making investment decisions can be extremely attractive to institutional and individual investors. For most, it seems to promise safety if not job security.
           
             Other areas covered in ‘Getting Psyched for Wall Street, include risk psychology, how personality affects investment success, rational approaches to an irrational market, and how gender influences investment prowess.
 
Investor psychology and behavioral finance is a powerful force. It can be the difference between looking at your portfolio as a bad hand in a big-stakes poker game or a golden goose," said Murstein. 
           
            ‘Getting Psyched for Wall Street costs $23.95 and is available online at Amazon.com, at selected bookstores, or at the publishers web site,  www.cypresspublishing.com, where shipping is free. Additional information about the book, including excerpts and reviews is also available on the publishers website.
 
 
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