Behavioral Economics

How To Invest Wisely and Successfully

10 Lessons Intermediate

About this course

The purveyors of financial advice and products have made it easy for anyone to invest, even if they only have a few hundred dollars. But, investing wisely and achieving success is much more difficult. This course will cover some of the obstacles that stand in the way of investors and show you how to overcome them.

We'll cover the complexity of financial markets, behavioral finance, required skill sets, investor types, the investment policy statement (IPS), and have a discussion about the next steps you can take after you finish the course. There is a proficiency quiz after the course is completed. You can use your score to tell whether you might need to revisit a chapter or two. 

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Course Structure

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Why investing wisely is so hard

Due to the myriad obstacles investors encounter, the average non-professional investor underperforms the broad market averages by a significant amount. They leave too much money on the table. In this lesson, you'll begin to understand why.
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Complexity of Financial Markets

Financial markets are inherently complex mechanisms that operate as an open auction. Specialists and floor brokers maintain bid-ask spreads and the direction of the market is unknown until either the buyer steps up and pays the asking price or the seller hits the buyer's bid.
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Behavioral Biases & Emotional Investing

We all have biases that influence our decisions regarding the stock market. This lesson will cover the most common ones.
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Information Overload & Misinformation

There is no shortage of information about companies and the economy, but making sense of it all takes time and practice.
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Investor Types

There are many different types of investors, and it's important to match your investment strategy to your investor type. For example, a buy-and-hold investor type should not have a strategy that calls for frequent trading to avoid relatively small losses. And a day trader shouldn't use a process that calls for long periods of time focusing on other tasks.
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The successful investor's skill set

An investor does not need to have an advanced degree in math or be a Certified Financial Analyst to tackle the complexities of the financial markets. All it takes is a little study and an open mind.
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The Investment Policy Statement (IPS)

This all-inclusive game plan is designed to remove as much emotion and subjectivity from the decision process as possible.
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Example Portfolios

In this lesson we take what we learned about asset allocation and stock selection, and put together three model portfolios that will give us a framework for choosing our own securities and asset classes.
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Next Steps

Now that you have your IPS in place, it's time to execute it. Go slowly at first, make some mistakes, and learn from then. Update and improve your plan as you go.
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Investing Wisely Quiz





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