Modules for Investors
Investment Biases - Part 2
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Follow your endevour
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Constantly moving towards your goal by assessing your prejudices to avoid harm.
Follow your endevour Most investors – amateurs and professionals alike – repeatedly fall into traps that are described by experts in the field of Behavioral Finance. Investors are likely to continue an endeavor if they have already invested in it, whether it be a monetary investment or effort that we put into the decision. This state in investment is defined as Sunk Cost Fallacy. As a result of the sunk cost effect, investors stubbornly hang on to a losing position, hoping that it will eventually return to the price we paid for it. Investors get scared of the wild price fluctuations, or the heightened volatility. The boiling frog syndrome is one of those myths with vast practical implications. Like that mythical frog, we are not wired to recognize slow, gradual changes. To invest approprately we need to understand these in detail. We also need to learn about investment biases that helps in saving from losses To help you understand more about other investment biases, we are here to help you. Read about importance and journey of biases in investment on Smart Money by Angel Broking and put it to actionable use.