The field of “cognitive finance” is approached by the exploration of decision strategies in the financial settings of spending, saving and investing. The advances in behavioural approaches are expanded by applying cognitive methods to financial questions. Research in cognitive finance stands in the long tradition of the interaction between psychology and economics.
Cognitive Investing provides a focused perspective and a set of useful tools and techniques for individual investors to prosper in today’s complex investing environment. It is based on principles and insights that are independent of the current market conditions and has stood the test of time. It provides thorough understanding of how the financial ecosystem actually works, not on how it should work, how others want it to work, or erroneous interpretations of how it works.
Cognitive Investors understand the many types of risks and their paradoxes and intelligently use the principles of asset allocation, security selection and market timing to build portfolios customized to fit their unique needs and circumstances. They understand the many ways psychological biases can negatively effect investment decisions and adhere to a process that minimizes the effects of these biases. They know what changes to make to their portfolios and when to make them as asset prices inevitably fluctuate. They are satisfied with their investment results because they steadily and reliably surpass the results derived from other more random approaches and are well equipped to deal with an unexpected or sudden influx or outflow of cash. Cognitive Investors can confidently tune out and ignore the media assault of dire predictions, attention-grabbing headlines and pundit maxims.
They possess the peace of mind in knowing that their financial lives are under control!