Behavioral finance combines psychology and finance and identifies human traits that affect investment decisions. These emotions include being overconfident, feeling regret when investment decisions generate losses, and perceiving gains as the “house’s” money. Individuals tend to acquire assets with which they are familiar; they isolate (mentally budget) individual investment decisions and selectively remember investment results. Investors also follow a herd mentality. These are some of the personal traits that often lead to poor investment decisions. Technical analysis seeks to identify potential investments by examining the past performance of the market or individual securities. Technical analysts or “chartists” stress the past as a means to predict the future. Technical analysis removes emotion and is diametrically opposed to the fundamental analysis that stresses future earnings and dividends (i.e., cash flows) appropriately discounted back to the present. Several technical approaches such as the Dow Theory and Barron’s confidence index attempt to identify changes in the direction of the market. Because individual securities prices move together, the determination of a change in the market’s direction should identify future movements in individual stock prices. Other technical indicators such as point-and-figure charts, bar graphs, and moving averages may be applied to the market and to individual securities. By constructing various charts, the technical analyst determines when specific securities should be bought or sold. Whether technical approaches to market timing and stock selection lead to su- perior returns is an empirical question. With some exceptions, academic research has produced little support for technical analysis. These results suggest that investors may achieve similar or even superior results by purchasing and holding a well-diversified portfolio of securities.