Behavioral Biases and Investment Decisions

Investopedia has an interesting article on the different biases that investors have. We can all empathize at some level with these:

  1. Overconfidence – in both the information that we have and on our ability to time the market with that information.
  2. Not taking losses, aka, reducing regret.
  3. Making the most satisfactory decision instead of the most efficient decision.
  4. Chasing trends

The best way to avoid the pitfalls of human emotion is to have trading rules. Or use algorithms like we do to make those decisions for you.

Read the whole thing: 4 Behavioral Biases And How To Avoid Them

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