Influence and Overconfidence bias

01:11 Mins Read

Smart ways to invest, without being prejudiced.

Transcript

It is impossible for most people to be impartial in making investment decisions. Although investors can reduce bias based on understanding and identification, they can then create trading and investment rules that help reduce bias. Understanding where the markets are going then on is one among the foremost important skills in finance and investing. It’s fascinating to ascertain how common it's to listen to fund managers state something like, “I know everyone thinks they’re above average, but i actually am.” Influence bias is a cognitive process which is natural to everyone. The danger of an overconfidence bias is that it makes one susceptible to making mistakes in investing. Overconfidence tends to form us but appropriately cautious in our investment decisions. Many of those mistakes stem from an illusion of data and/or an illusion of control. It is mandatory to overcome biases in order to invest smartly. If this all sounds daunting to you, Don't worry we are here to help! To know more and learn about it -- Read about investment on Smart Money by Angel Broking.

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