IN LAST month’s article we touched on having the right mindset and being aware of how our minds and emotions work when it comes to making investment decisions.
This article delves a bit further into the particular biases that we all have to a certain degree. The aim is to understand how our cognitive and emotional biases can potentially impact our investments.
Cognitive bias
This bias involves using mental short cuts or ‘rules of thumb’ to make decisions. problem is that these may or may not be accurate.
We highlight some examples below: