In this chapter, we examined behavi

In this chapter, we examined behavioural finance and technical analysis. We learned
that a key to becoming a wise investor is to avoid certain types of behaviour. By studying
behavioural finance, you can see the potential damage to your (or your client’s)
portfolio from overconfidence and psychologically induced errors.
The evidence is relatively clear on one point: Investors probably make mistakes.
A much more difficult question, and one where the evidence is not at all clear, is
whether risks stemming from errors in judgment by investors can influence market
prices and lead to market inefficiencies. Market efficiency does not require that all
investors behave in a rational fashion. It just requires that some do.