Usage of mathematical and statistical methodology to understand behavioral biases
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giraldo
Apprentice
Joined: 11 Jan 2006
Posts: 3
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 Posted: 06/21/08 - 05:47 Post subject: |
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| I have recently been looking to start with investments. I have accumulated fair amount of assets and I have looking into the most efficient way to invest. I would like to know what is the usage of mathematical and statistical methodology to understand behavioral biases. Thanks in advance. Any info will do and really mean a lot. |
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ellery
Apprentice
Joined: 13 May 2006
Posts: 3
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| Posted: 07/21/08 - 00:47 Post subject: |
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| Any investment carries with it a risk in part. That is why you need to make sure everything goes as you plan, and that you make a good plan. When it comes to ensuring the value of your portfolio, you have to be aware what kind of portfolio you want to create. Behavioral finance is a bit specific area, and the main themes are heuristics, market inefficiency, and framing. Mathematical and statistical methods are used much for experimental methods such finances are relying on. The bias is on rationality of traders, but the subjective biases are generally went around through using precise means. Hope you will find the info helpful. |
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