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Hi, and welcome to the Longview. I'm Jeff Battack, Global Director of Manager Research for Morningstar Research Services. And I'm Christine Ben's Director of Personal Finance for Morningstar, Inc.

Our guest in the podcast today is Mayor Stapman, the Glenn Klimick Professor of Finance at Santa

Clara University and a specialist in behavioral finance. Mayor's research focuses on how

investors and managers make financial decisions and how these decisions are reflected in financial markets.

It has been published in the Journal of Finance, the Financial Journal, the Journal of Portfolio Management, and many other journals.

Mayor has also received numerous awards for his research, including three Graham and Dot Awards and the Matthew R. MacArthur Industry

Pioneer Award. His latest book, Finance for Normal People, was just released in paperback.

Mayor, welcome to the Longview. I'm delighted to be with you, Jeff and Christine.

So let's start with a bit of stage setting. The first wave of behavioral finance put a pretty

big emphasis on investors'

behavioral mistakes, contrasting rational with irrational behavior, but you prefer a different

way of framing the issue. You think most investors are behaving normally. It so happens they're

just attaching expressive or emotional benefits to their money versus what you know, what might be thought of as strictly

utilitarian benefits? It's probably easiest to grasp attaching emotional benefit to our investments.

So would an example be a young person who derives a lot of comfort from having cash on hand,

even though all the finance literature would say that he or she should invest quite aggressively?

...