Thorsten Hens is an economist from Germany. He is Swiss Finance Institute Professor of Financial Economics and director of the Swiss Banking Institute at the University of Zürich.
His research areas include, among others, Behavioral Finance and Evolutionary Finance. According to the Handelsblatt ranking, he was ranked among the top 10 economics professors in the German speaking area (Germany, Switzerland and Austria).
In researching how investors make their decisions, Professor Hens draws on work in psychology and applies insights from Biology in order to understand the dynamics of financial markets. His consulting experience includes application of behavioral finance for private banking and evolutionary finance for asset management.
Every investor knows that without taking risk, attractive returns are not achievable. For this reason a modern risk manager should make it possible to control risk through diversification and hedging strategies. Research of psychological risk reveals two types of mistakes in risk management made by private investors.
On the one hand, psychological research shows which psychological traps investors fall into, causing them to take unnecessary risk. On the other hand, the research demonstrates which types of risk investors fear. If one has a misunderstanding of the risks investors care about, then precisely these risks may be left unmanaged in a portfolio.