• Home
  • Personal Finance
  • Investing
  • Business
  • Career
  • Consumer
  • Debt
  • Lifestyle
  • Retirement
  • Taxes

Personal Finance News

Latest News About Personal Finance

  • Blogger Net Worths
  • Top Personal Finance Blogs
  • Blogroll

Two Common Biases that Lead to Erroneous Investment Decisions

February 23, 2016 Leave a Comment

Forbes Contributor Mike Patton explains that the reasons behind do-it-yourself investors routinely sabotage their investment success are due to two common biases. “Two of the most powerful emotions we experience are fear and greed. When an individual invests in the stock market and stock prices decline, at some point the pain becomes too much to bear and fear begins to dominate. This investor may believe that things will only get worse and that the near term will resemble what has happened most recently. In short, they become convinced that stocks will continue to decline and decide to sell everything, thus escaping further pain. This is called the ‘recency bias’ and is quite common… The second bias is the ‘bandwagon effect.’ Many investors have a subconscious, but strong tendency to follow the crowd. If everyone is doing it, it must be right.” Hopefully Investors who manage their own portfolio can learn these two common biases and avoid making the costly mistake. (forbes.com)

Related

Leave a Comment Cancel reply

Must Read

  • What's the Recommended Temperature for Vacant Home in Winter?
  • 5 Tips To Get The Best Value On An Insurance Policy
  • How to Refinance a Paid Off Car
  • Two-Thirds of Americans Live Paycheck to Paycheck
  • The Best Day of the Week to Buy Mutual Funds
  • Best Pen for Your Money
  • How to Cash Out Pension Plan Early
  • Professional Panda Cuddler as the World's Best Job for $32,000 per Year
  • 61% Now Living Paycheck to Paycheck
  • Americans Have Never Been In So Much Debt

Recent Posts

  • 5 Tips To Get The Best Value On An Insurance Policy
  • 61% Now Living Paycheck to Paycheck
  • 36% Earning $100,000 or More Living Paycheck to Paycheck
  • Two-Thirds of Americans Live Paycheck to Paycheck
  • The Hit to Your Pocketbook From Higher Gasoline Prices: $2,000 a Year
  • Uber Now Lets You See How Many One-Star Ratings You Received From Drivers
  • Survey: 7 In 10 Americans Living Paycheck To Paycheck
  • Fed May Issue Digital Currency

Connect With Us

  • Facebook
  • Twitter
Home · About · Terms · Privacy · Contact · Copyright © 2023 · Personal Finance News