Decision Making in Personal Investment

Revision with unchanged content. To spend or to save? That is the choice for anyone with spare cash. The internal conflict we experience between our immediate desires and our responsibility towards our future has been recognised since ancient times, and is now studied scientifically in the burgeoning field of behavioural finance. Investors save rather spend some of their money in the expectation of increased spending power. The price paid for the higher spending power is postponement and exposure to risk. This book examines how delay and risk may influence personal investment decisions. Three main questions are addressed through innovative empirical research: Can the increasing value of compound interest returns justify the delay to their receipt? How do risk an investment term jointly affect the appeal of investments? How do investors choose on the basis of historical returns while knowing that past returns may not predict future returns? This title will appeal to psychologists, economists, finance professionals and researchers seeking understanding of how personal investment decisions are made, and how delayed and uncertain rewards are valued.