The author answers questions shared by the French in need of investment of their savings in an uncertain financial market, but also by their banking or independent advisers, faced with the development of Artificial Intelligence. His latest book focuses on behavioral finance, which introduces the psychology of actors in financial decisions, and wealth management, which has become difficult due to the diversification of types of transactions and financial products. He recalls the fundamentals of classical finance, based on the rationality of investors, on the notion of fundamental value, and on the principle of market efficiency (defended by Fama), then he poses the hypotheses of behavioral finance, based on the (relative) irrationality of the actors, the notion of market value, and the sub-efficiency of the market (supported by Minsky and Thaler).
After explaining the main models of classical and behavioral finance, Yannick Coulon analyzes at length, after Tversky and Kahneman, the multiple psychological biases – perceptual, cognitive, and emotional – as well as collective, which affect the arbitrations of investors and their advisers. He demonstrates the value of active and passive portfolio management. He shows the limits of AI management and graphical analysis. He recalls the regulatory framework for financial investments (MIFID 1 and 2) and real estate.
The book is accompanied by quotes, diagrams, tests, and illuminating examples. The reader will regret that it does not sufficiently explore the issues related to structured products and crypto-assets.
The author has a long experience as a banker and is currently a professor in a management school.
Jean-Jacques Pluchart