Modules for Investors
Investment Biases - Part 2
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The opmistic thinking!
01:10 Mins Read
Risk of relying on community knowledge and their types if they do not have their own knowledge.
The opmistic thinking! when we are uncertain, we are willing to place an enormous amount of trust in the collective knowledge of the crowd. Quite frequently the crowd is mistaken because they are not acting on the basis of any superior information but are reacting, themselves, to the principle of social proof. Investors feel pressure to time their purchases of stocks perfectly in order to maximize their returns. Hindsight bias is a psychological phenomenon in which one becomes convinced that one accurately predicted an event before it occurred. Such risks might be financial, such as placing too much of your nest egg in a risky stock portfolio. They might also be emotional, such as investing too much of yourself in a bad relationship. Don't worry we are here to help in this super biased world. To know more and learn about it -- Read about biases on Smart Money by Angel Broking.