These biases may journey up your funding course of and render your efficiency lower than preferrred.
This record is taken from the e book “The Artwork of Considering Clearly” by Rolf Dobelli.
You may take a look at Elements 1 and a couple of HERE and HERE.
Listed here are three extra phenomena that traders ought to be aware of.
6. End result bias
End result bias describes a scenario the place traders choose the standard of a call when the end result is already recognized.
Additionally they have a tendency to put an excessive amount of emphasis on this final result.
You may name final result bias the cousin of hindsight bias, which makes traders assume they know what’s going to occur earlier than it even occurs!
As investing typically requires decision-making below situations of uncertainty, randomness typically performs a task in figuring out sure outcomes.
Bear in mind too that chances additionally play a task in mapping out a complete vary of anticipated outcomes, and these could also be too…
