NeuroInvesting: Build a New Investing Brain

Praise for NeuroInvesting " NeuroInvesting boldly breaks new and critically important ground in the fields of investor psychology and strategy. By combining cutting-edge neuroscience with a deep understanding of the mind of the investor, Wai-Yee Chen insightfully probes the nuances of how to effectively create winning portfolios. NeuroInvesting represents a major advance in practical investment psychology and strategic decision-making, as well as significantly developing the application of neuroscience to enhanced self-control and awareness. Reading and reflecting upon this work of Wai-Yee Chen will significantly enhance any investor's ability to trade with confidence, intelligence, and perhaps most importantly, wisdom." —Jeffrey M. Schwartz , MD, Research Psychiatrist University of California, Los Angeles author of You Are Not Your Brain and The Mind & The Brain " NeuroInvesting presents some interesting ideas that most traders and investors will not have considered. You can take a test to determine your dominant personality traits and then learn 1) where your weaknesses are as an investor and 2) how your brain contributes to those tendencies. Plus, the book is full of interesting ideas such as 'avoid a big meal of steak and wine during a bear market.' If you want to step outside of the box and explore how your brain works, then you will probably enjoy this book." —Van Tharp , PhD, author of Trading Beyond the Matrix "This thought-provoking and adroit book provides a masterful synthesis of many fields of research. Wai-Yee Chen cogently weaves together relevant areas of neuroscience, psychology, and investing to provide an illuminating analysis of investment related to the economy. A great read!" —John B. Arden , PhD, author of Rewire Your Brain: Think Your Way to a Better Life "This is a remarkable book. Wai-Yee Chen shows how neuroscience promises further to advance our knowledge of financial markets by identifying the neural processes that motivate investors' decisions. In particular, the book examines the brain's role in minimising threat and increasing reward. The result is a very enjoyable and easy-to-read insight into how the behaviour of large groups of consumers or investors can and does impact financial markets. This book should be required reading, not only for those involved in financial investment, but also for all those who have to make business decisions." —Colin Wallace , PhD The Center for Applied Neuroscience "It is hard to overcome your psychological biases . . . so don't! Use them to your benefit. NeuroInvesting shows you how to understand your own personality traits and then invest with a style that is consistent. Brilliant!" —John Nofsinger , PhD author of The Psychology of Investing

Preface Acknowledgments   Part One Being, at ease Chapter 1 Money and Me My Money Personality The Big Five Personality Traits Money and Me Notes   Part Two: The Tension from Impulsiveness Chapter 2 Thrills, Ego, and Impulse: Is It Bad; Is It Me? What is Impulsiveness? What About Impulse? Keeping Impulse and Impulsiveness at Tension The Impulsive Meter Notes   Chapter 3 Impulsiveness and Our Brain: Dopamine and the Reward Network Impulsiveness and Dopamine Dopamine Neurons Dopamine and the Trader Dopamine Withdrawal Symptoms Novelty Seeking Gene? Dopamine’s Engine Room and Neuro–Network Notes   Chapter 4 Beating Impulsiveness: Keeping impulse at tension Taut and sharp Serotonin–Effect Right Brain to the Rescue Engaging Rational Brain Setting Rules and Sticking to Them Emotional Pain and Fear In Conflict Brain Loop Be Open Play Your Own Game Notes   Part Three: The Tension of Fear Chapter 5 How Did Fear Get Here? Expectations, Let–down and Anxiety A Big Expectation A Clean Slate? Prevalent Fears Personal Fears Notes   Chapter 6 Are Fears Bad? Fear Takes the Role You Give It Passing Up Good, Profitable Opportunities Buying at the Top Sucked Into Products with High Yield Counter–Productive Trading Unnecessary Protections Fear Incapacitates Inability to Accept Losses Fear Causes Brain Freeze Fear Costs Notes   Chapter 7 Reacquaint with Fear: Been Burnt, Done That The Pandora’s Box of Fear Engine Room of Fear Process of Fear The Making of Fear Memories How Real are Memories? Recreating Trading Memories Other Fear Management Techniques Notes   Part Four: Instincts At Tension Chapter 8 Emotions and Beliefs: Who is in Control; What is Real? Emotions What Are Emotions? The Emotional Neuro–Network Value of Emotions Emotional Expression of Goals Our Beliefs: The Unspoken Goal Instinct Encapsulates All Notes   Chapter 9 Expressions of Instincts: Are Your Instincts Under–Valued? A Culture of Anti–Instinct Your Instinct Awaits Expressing Instincts Home To Instincts The Instinct Meter Mirror Neurons in Trading Workings of Mirror Neurons Practice Instincts Avoid Instinct Killers Avoiding Anti–Instincts Notes   Chapter 10 Nurturing NeuroInvest: What is Your Mental Personality? How To Be An Excellent Instinctual Investor NeuroInvesting is A Journey Notes   Chapter 11 Summary of the 12 NeuroInvesting Trading Strategies   Appendix A Big Five Inventory Questionnaire (adapted) The BFI Scale Scoring Instructions Notes   Appendix B Barratt Impulsiveness Scale (Revised) Note   Appendix C The Maudsley Medical Questionnaire 1 Note   Appendix D Word Connection List 1 Note  

Wai-Yee Chen, CPA, MAppFin, is an investment adviser and professional portfolio manager who specializes in the use of options in growing, protecting, and income-enhancing investment portfolios of her high-net-worth clients. Wai-Yee's more than seventeen years' experience in trading and advising clients in mostly equities and derivatives gives her a unique perspective into how investors' own personality, psychology, and behavioral traits affect their investing style and returns. Her market insights and investment ideas are regularly sought after by investment magazines, journals, and TV channels CNBC and Sky Business, and she is a coach to fellow advisers and investors. Wai-Yee's skillfulness in drawing on the sensitivities of neuroscience, psychology, and philosophy of investing, combined with her knowledge of the fast and dynamic worlds of derivatives and stocks, makes her both a swift and considered investor/adviser.