Submitted to:
Prof. Tuhin Banerjee
Submitted by:
S Bharat Kumar (13046)
Surya Prakash Hinduja (13116)
Behavioral finance is the study of how investors make decisions- and how these decisions affect the
stock market movements. Investors are humans, and humans are not perfectly rational. When they
buy on emotions, they not only jeopardize their own investment plans, but also create opportunities
for others in the markets.
JP Morgans behavioral finance:
Highlights:
Rationale:
Study, analyse and document behavioral biases among investors. This could create new
opportunities for investment managers, as not all investors are perfectly rational and this
creates opportunities for investment managers
Launch: 2003
rd
$76 Billion
BRANDS:
JP MORGAN
Investments Bank
Mergers and Acquisitions
Capital raising
Restructuring
Risk management
Research
Proprietary trading
Market making
Asset Wealth Management
Private Bank Wealth management for clients worth more than $25 Million
JP MORGAN CHASE:
CHASE
Asset mix:
Behavioral platform
Research model platform
Manager driven platform
Investors take additional risk only when they are compensated by more returns Modern portfolio
theory
Behavioral biases emphasized by JP Morgan
Over confidence
Loss aversion
Disposition affect
Strategy implementation
Advising services
JP Morgan:
Strengths: Global financial firm with operations in more than 50 countries, assets of more than $1.3
Trillion
Threats: Competing asset management firms used similar investing principles. Some embracing
psychology and behavioral finance in retail market
Challenges and goals:
To continue the winning streak on a larger scale
They have been successful across Europe, and are expanding in US. Recently they entered
Japan.
To solidify JP Morgans behavioral finance brand with retail investors
Recommendations: