Progress in behavioural finance over the past decade has made it much more important. While it lacks a single established body of theory with anything like the elegance of modern portfolio theory, it is developing a strong set of ideas that have dear implications for investment managers. Few of these will make for good investment strategies that exploit market pricing anomalies, but that does not mean they are not valuable. Investment decision-makers can develop a toolbox of heuristics that will make for better decisions. Communication with clients can be fine-tuned to make for far better relationships with them and can assist client behaviour while professional investors are equipped to watch out for biases of their own. These are important for the investment industry and provide a clear case for investment managers to take behavioural finance seriously.
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