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Exploring the Impact of Ego on Investment Decisions
Ego plays a significant role in investment decisions through overconfidence, where individuals tend to believe they are luckier, smarter, and better at forecasting the future than others. This overconfidence leads to underestimating risks and taking outsized risks. Despite being beneficial in various aspects of life, such as boosting self-esteem and motivation, overconfidence can be detrimental in investing by clouding judgment and leading to poor decision-making.