Herd and Recency bias.

01:10 Mins Read

Impact of mob mentality and latest news i.e. assessment of herd and novelty predestination.


Herd and Recency bias. Being an adult is no piece of cake. It involves a lot of calculation. And often in these calculation we become lazy and get aatcked by herd mentality. If everyone's doing it. It must be right. This also means that Everyone is looking for a sense of participation and belonging so they follow what everybody is doing. In case of investments this herd mentality leads to Booming behavior in the market. This creates an investment bubble, which leads to an increase in the prices of properties more than their value. Apart form this, there also exists a bia which exhibits our nature of liking fresh things. The recency bias. Recency bias means to pay the most attention to recent news and not to consider past or old news. There are definitely many ways to overcome these biases. 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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