What are some common biases that affect investors?

What are some common biases that affect investors?

Common biases include overconfidence, loss aversion, and confirmation bias. Would you like to know more about any specific one?

Can you explain overconfidence bias?

Overconfidence bias occurs when investors overestimate their knowledge or ability to predict market movements, often leading to risky decisions.

How does loss aversion impact investment decisions?

Loss aversion makes investors more sensitive to losses than gains, often causing them to hold onto losing investments longer than they should.

What can investors do to mitigate these biases?

Investors can mitigate biases by educating themselves, seeking diverse opinions, and using systematic investment strategies.