When investors are impacted by information overload, they become more susceptible to the status quo bius. They also tend to over react and sell that stock down much more than we should. What happened last quarter or last month is probably not the best barometer for what a company is going to do over the next ten years. There's quite a bit of really interesting data that shows that if people will buy the worst performing stocks over a certain period of time and sell the best performing stocks over that same period of time, that is generally a profitable strategy.
#388: Recessions are terrifying.
Market crashes often bring out the worst in people’s anxieties and fears.
This fear triggers us to act even more irrationally than usual – which can lead to making expensive mistakes in our investment portfolios.
In today’s episode, Scott Nations, who spent his career studying market volatility, describes some of the most common cognitive biases and irrational behaviors that investors make. He shares tips on how to master the mental game of investing, especially in turbulent times.
For more information, visit the show notes at https://affordanything.com/episode388
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