Each person is different, and the biaces that you yourself might be most susceptible to are different than your spouses or your colleagues or your neighbors. So part of recognizing your cognitive biases comes from recognizing your own susceptibility. And so taking that personal inventory, knowing yourself, can help you be a better investor. That'sthe ond key take away. Finally, key take away number three: During stressful financial periods, which, by definition, market crashes are stressful, that's when you see all of the biases come into play in a very strong way.
#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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