Page 7 - e_tr08_2012

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7
The Key to Better Trading Decisions
Behavioural Finance
Dominant capital market theory is based on the assumption that all individuals
act in a rational manner. It is assumed that utility maximisation is at the centre
of action of every person and decisions are always made based on the full
processing of all important information. Not only has the financial crisis caused
changes in this thinking but it is now clear that former theories have to be
adapted to reality and have to be reconsidered.