Tag: investment decisions
Understanding Escalation of Commitment in Investor Psychology
When it comes to making investment decisions, our minds can sometimes play tricks on us. One such psychological bias that affects investors is known as the “escalation of commitment.” This phenomenon refers to the tendency to continue investing time, money, or resources into a decision, even when evidence suggests that it may be the wrong…
The Halo Effect: Unveiling the Sneaky Bias in Investing Psychology
The Halo Effect: A Sneaky Bias in Investing Psychology Have you ever found yourself making investment decisions based on your gut feeling rather than cold, hard facts? Or perhaps you’ve fallen into the trap of blindly following the crowd when it comes to picking stocks? Well, my friend, you may have unknowingly succumbed to the…
The Base Rate Fallacy: How Ignoring General Information Can Impact Your Investment Decisions
The Base Rate Fallacy: How Ignoring General Information Can Impact Your Investment Decisions When it comes to making investment decisions, our brains often have a funny way of leading us astray. One common cognitive bias that can trip us up is known as the base rate fallacy. This phenomenon occurs when we ignore general information…