Investment Psychology

You learned the machinery of investing — assets, risk and return, funds, what a return really means. Here’s the uncomfortable sequel: the biggest threat to your portfolio is usually the person holding it. Human brains were tuned for the savannah, not the stock market, and the same mental shortcuts that keep you alive crossing a road quietly sabotage you when you trade.

This course teaches the psychology behind those mistakes from absolute zero — no prior behavioural economics, no jargon left undefined — built mostly on the Nobel-winning work of Daniel Kahneman and Amos Tversky, and aimed squarely at real investing decisions. We don’t treat biases as a fun list of curiosities: for each one you’ll see the mechanism, the evidence (and where it’s shakier than the headlines claim), worked numbers, and exactly how it shows up in your portfolio, your trading, and the gurus you’re tempted to follow. You’ll learn:

• Your two minds — the fast, automatic gut and the slow, effortful checker, and why markets are a hostile place for intuition.
• Prospect theory — how you really feel gains and losses: reference points, loss aversion, diminishing sensitivity, and the strange way we weight probabilities.
• Sunk costs and the disposition effect — why we sell winners, marry losers, and throw good money after bad.
• Overconfidence and overtrading — the calibration gap, the illusion of control, and the measurable bill that hyperactive trading runs up.
• Anchoring, framing and mental accounting — how an irrelevant number, a re-worded fact, or a mental “bucket” hijacks a decision.
• Availability, representativeness and base rates — judging by what springs to mind or what resembles a stereotype, and the gambler’s-fallacy trap.
• Confirmation bias and narrative — the stories we tell to defend what we already believe, and how to write a thesis that can actually be proven wrong.
• Herding, FOMO and bubbles — how crowds, cascades and fear of missing out inflate manias (and why going contrarian is no free win).
• Survivorship and selection bias — why the funds, backtests and gurus you see are a rigged sample, and how to vet a track record.
• A debiasing toolkit — checklists, premortems, the outside view, a decision journal, sell rules and automation, and the discipline of judging process over outcome.

You can’t delete these biases — they’re standard human firmware. But you can learn to spot them and build a process that routes around them. That’s the difference between knowing how investing works and actually surviving it.