Habit #4:
Mind your behaviour
Minding your own behaviour plays a critical role in your acts as an investor. We humans are not hard-wired to be rational beings despite the fact that we clam this honour. The truth is that we are rationalising beings. We make emotional decisions and then try to rationalise the same with logic.
Minding your own behaviour plays a critical role in your acts as an investor. We humans are not hard-wired to be rational beings despite the fact that we clam this honour. The truth is that we are rationalising beings. We make emotional decisions and then try to rationalise the same with logic.
Sensible
investing however requires that we notice where our emotions are guiding us to,
and then take preventive measures to fall in emotional traps. Traps like:
- Being overconfident – We know all the right answers!
- Wishful thinking – Hearing from others what we believe to be true.
- Availability bias – Believing the news that’s readily available.
- Framing – Going by how words are framed and not the rationale behind the same.
- Following the herd – My truth, your truth, ‘the’ truth!
Refences:-
No comments:
Post a Comment