Behavioural Finance for Private Banking by Thorsten Hens and Kremena Bachmann

Bachmann and Hens provide a quick intro to classical asset allocation (Markowitz), Kahneman & Tversky's prospect theory, and several of the behavioral econ irrationalities. While they walk through an analysis of several products, the relevant points would have been better explicated had they taken common investment products and tweaked them to generate returns more in line with measured human psychology.

People tend to feel the loss of a dollar more than the gain of a dollar (in absolute happiness units ;), which indicates that people should construct insured investment portfolios. By sacrificing some of your annual returns to guarantee those returns, you hedge against downside risk. Any common stock / mutual fund / ETF investor can take advantage of options markets to buy some insurance for your portfolio. Just like you buy insurance for your house, you can buy insurance for your portfolio, so you don't have to deal with massive losses like we just recently saw in many people's retirement holdings.