Part 10/13:
The course outlines both time-weighted and dollar-weighted returns as essential benchmarks for evaluating investment performance. Active versus passive investment management debates are also addressed, advocating a hybrid approach that balances risk tolerance and investment goals.
The Importance of Behavioral Finance and Risk Management
Behavioral finance examines how psychological facets affect financial decisions. Through biases like overconfidence and loss aversion, individuals can make less rational financial choices. Recognizing these tendencies can help investors avoid common pitfalls.