Introduction: Emotions and Intelligence in Investing

Abstract

Investors make decisions in two ways, the intelligent way and the emotional way. The intelligent way involves a careful examination of macroeconomic and microeconomic fundamentals that determine the p-price of different assets and individual stocks. The emotional way involves intuition and emotions. Each decision-making style has its advantages and disadvantages, especially emotional investing, which is subject to fundamental biases and errors of the human brain that can end being very costly for investors.