Investment Behaviour

Let the Halo effect not take over your finances!

November 7, 2019

Post Views: 20 How often is that you chose someone for a particular task just because he is nice and end up making a bad choice? This is the phenomenon of Halo effect where one attribute of a person overshadows the other attributes and influences the decisions we take. The attribute niceness of your partner […]

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Outcome Bias

Beware of outcome bias while investing

April 25, 2019

Post Views: 732 Beware of outcome bias: Focusing on process pays higher dividends There is a human tendency to focus entirely on the outcome and not on the process. Someone scoring good marks, someone winning a game, election, fight, etc. has a lot to do with overall context under which the results came. Many times […]

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Social Proof

Do you need social proof to invest?

March 12, 2019

Post Views: 606 Social Proof plays a very dominant role in decision making by those people who are not confident & thorough enough about a particular subject. Historically, people have felt safe and confident in following the herd instinct. The more people that display a certain behavior, the more acceptable we think that behavior is. […]

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Sometimes inaction speaks louder!

February 20, 2019

Post Views: 511 Sometimes inaction speaks louder! – Action Bias If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring. – George Soros When the investors are not clear of the situation in the market, they are prone to action bias i.e. they trade even though there is […]

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Sunk Cost Fallacy

Are you still considering the stock price you have paid?

January 3, 2019

Post Views: 1,246 (sunk cost) There is a misconception that people make rational decisions based on the future value of objects, investments, and experiences. But the truth is that decisions of many people are tainted by the emotional investments they accumulate and the more they invest in something the harder it becomes to abandon it. […]

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