Stop. Think. Invest.: A Behavioral Finance Framework for Optimizing Investment Portfolios

Use the power of behavioral finance to make smarter, better-informed decisions through every step of the investing process

In an economy where markets are more unpredictable than ever, emotions can derail the efforts of even the most experienced investors and wreak havoc on portfolio returns.

Applying powerful behavioral finance concepts, Stop. Think. Invest. provides a framework for identifying personal biases and avoiding mistakes that can cost big profits. Based on the author’s extensive research and 100 key behavioral finance concepts, this guide provides a winning 12-step process you can use to successfully manage your trading and investing for long-term success, including:

• Begin the initial research into a new stock
• Create an investment thesis—why are you buying the stock?
• Trade timing and size—when are you buying and how much?
• Make the initial purchase
• Review the trade—round up or round down
• Test your original investment thesis

Stop. Think. Invest. reveals critical information about behavioral finance flaws, such as anchoring, confirmation bias, recency bias, and loss aversion.

Unlike other behavioral investing guides, Stop. Think. Invest. offers a fully organized and practical approach to applying behavioral finance to everyday investing.

Michael Bailey, CFA, is Director of Research and Investment Committee Chair for FBB Capital Partners, a boutique Washington, D.C., investing firm with $1.4 billion assets under management, as of 12/31/2020. Bailey created and launched an investment strategy for managing a portfolio of stocks with high environmental, social, and governmental metrics. He served as principal and equity research analyst for Legg Mason and held positions at Bear Sterns and Raymond James.

"A balanced combination of intuitive story-telling and rigorous academic research makes worthwhile reading for both professional and serious non-professional investors. All investors will benefit from Mike Bailey's coaching tips and revelations about behavioral missteps on their journey to investing success." -- Bob Browne , CFA, Retired Chief Investment Officer, Northern Trust "Mike Bailey has pushed the field of behavioral finance in exactly the direction it needed: practical application in pursuit of better investment results. Stop. Think. Invest. is a compelling read for anyone wanting to be a smarter investor." -- Brian Portnoy , Ph.D., CFA, Founder, Shaping Wealth, author of The Geometry of Wealth " Stop. Think. Invest . helps reduce the emotional cost of investing by coupling years of professional stock picking with behavioral finance theory from Nobel laureates. Stop. Think. Read this book." -- Michael P. Krensavage , Founder, Krensavage Asset Management "Mike Bailey breaks down complex theory into simple actionable advice, whether you have been in the business for a lifetime or are just starting out. This one will make you Stop and Think before you Invest. " -- Ipsita G Smolinski , MBA & MPH, Founder and Managing Director of Capitol Street, and Healthcare Finance & Economics Faculty, Johns Hopkins Carey School of Business " Stop. Think. Invest. is a must-read for serious equity investors. Mike Bailey's insights cogently bridge investing with psychology. The durable concepts he shares, apt examples, and key takeaways are delivered to the reader with Mike's distinctive talents for critical thinking and characteristically upbeat messaging. A marvelous read - enjoy this book and the returns it will bring you!" -- Joseph F. Healy , CFA, Managing Director and Senior Equity Strategies Manager, Beacon Investment Advisory Services "This is a great read for all investment analysts, portfolio managers, and anyone who is interested in investing. Fantastic and practical behavioral tips are well written from a seasoned investment professional who has had decades of experience following various industries and leading investment teams." -- Xuying Chang , CFA, Senior Equity Analyst, Adams Funds

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