Master the thinking behind money management and financial trading.
The University of Chicago’s eight-week course on the psychology of finance will help you to gain insight into money management and financial trading.
Designed for business professionals and emerging leaders working in a management position for a financial institution or in general business management.
Understand the Psychology Behind What Impacts Supply and Demand
Global stock markets are constantly fluctuating. Our remote learning course will help you understand the psychological influences that drive market changes: the behavior of investors and financial analysts and how it impacts market outcomes.
After completing the course, you will be able to:
- Understand the psychology behind financial decisions made by business leaders and investors
- Neutralize relevant biases
- Make and encourage better financial decisions
- Explain the consumer choice theory
- Differentiate mental models related to behavioral finance
Behavioral Finance Curriculum
Our curriculum is designed to teach you the biases that influence decision-making processes and how to apply this knowledge to make unbiased, rational decisions that have lasting impacts across a range of investment scenarios.
- Describe concepts such as utility, probability weighting, the certainty effect, and survivorship bias, as well as risk, gains, and losses
- Explain the causation/correlation error, the mental error in probability weighting, the consequences of the anchoring bias, over-trading due to overconfidence, the equity premium puzzle, and active vs. passive mutual funds
- Evaluate subjective vs. absolute probabilities and the framing and reversal of preferences
Weekly course schedule
Learn to define and describe irrationality in human decision-making and in financial markets as well as to explain the basis and consequences of the consumer choice theory.
Gain insight into the Dual Process Theory and to use specific exercises to identify its influence on decision-making. You will also learn to use the Prospect Theory to explore the way we calculate risks and utility when making decisions, and the ways we avoid loss, and how anticipated regret can lead to problematic inaction.
Learn how to avoid mistakes when calculating probabilities and to utilize decision trees when calculating probabilities that depend on multiple factors. This module will also teach you to identify the factors that skew our calculations of probability.
Understand how to critically distinguish between correlation and causality, in relation to the financial market and learn to identify the biases that could cloud an investor's judgement. You will also be taught how to think analytically in order to make rational, unbiased decisions.
Identify the heuristics in our thinking, show how they can become biases, and explore these biases' effects on financial decisions.
In this module you will explore the effects of language on our framing, analyze our attachment to our belongings, and examine our attitude towards change.
Learn which financial trends traditional economics fails to predict, while examining the trends that behavioral finance can predict. You will also discover how and why financial bubbles form.
Understand the many factors behind our financial decisions, learn about the rules that all investors should follow, and the reasoning behind why most investors do not follow these rules.
Meet Your Instructor
Behavioral finance proposes that psychological influences and biases affect the financial behaviors of investors and financial practitioners. All types of market anomalies, especially those related to the stock market, can be explained through these psychological factors. In a time of increased uncertainty and market volatility, behavioral finance is rapidly growing in practice. Advisors seek the need to incorporate this analysis into their wealth management processes to improve client experience, deepen relationships, and deliver better results. In a recent survey targeted at financial advisors, 81% of them said they were using behavioral finance techniques to build their clients’ portfolios and communicate with them.
Potential job titles in Behavioral Finance
- Behavioral Economics Researcher
- Behavioral Scientist
- Financial Analyst
- Financial Associate
- Investment Manager
- Personal Financial Advisor