Similar to the psychological typing theories you may be familiar with, such as the Myers-Briggs type indicator, Behavioral Investor Types (BITs) are models for various types of investor. Knowing your investment type can help you determine what types of cognitive and emotional biases may impact your investment behavior. Knowing these potential pitfalls will help you develop strategies to overcome them, and base your investing decisions on hard data.
This framework has four behavioral investor types: the Preserver, the Follower, the Independent, and the Accumulator. Take the quiz below to discover your type.
“Michael Pompian brings something new to the field of behavioral finance books. By combining insights into our fundamental cognitive and emotional biases and investor personality types, he provides concrete, practical action steps to avoid making big mistakes. In classic Pompian style, he does this with efficient, easy-to-read prose. You do not want to make important financial decisions without reading this book.”
—Stephen Horan, Head of Private Wealth, CFA Institute; author, The New Wealth Management