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The Interplay of Overconfidence and Loss Aversion in Investing
Overconfidence in investing means that we believe we know more than we do or make better decisions than others./nLoss aversion states that losses feel more painful than gains feel good, causing us to double down on our losses./nOverconfidence and loss aversion can go hand in hand, leading to risk seeking behavior and poor decision-making in investing./nInvestors should recognize their limitations and learn from their losses to improve their investment decisions.