There are many cognitive biaces out there. Different people are susceptible to different biases. Some of them are more likely to impactus based on who we are and some of our brain chemistry. So if you're thinking about sell off an asset that's performing well, ask yourself what’s the true motivation behind that decision? Do you want the dopemin hit, or do you believe that some underlying fundamental has changed? And compare this decision to your investor policy statement, which is your written statement about your time line and risk tolerance. Is this decision aligned with your own written personal investment policies? These are some examples of and ways to manage a common Cognitive Biace.
#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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