Our unconscious strong biases affect our actions, our attitude and how we react to people and situations. Are you aware of your biases that affect your money managing decisions? “Investing success doesn’t correlate with IQ after you’re above a score of 25. Once you have ordinary intelligence, then what you need is the temperament to control urges that get others into trouble.”
– Warren Buffett
corporate actions (changes in the intrinsic value of the stock). It is the study of the influence of psychology on investors’ decision making.
Traits of behavioral finance are :
- Investors are treated as “normal” not “rational”
- They actually have limits to their self-control
- Investors are influenced by their own biases
- Investors make cognitive errors that can lead to wrong decisions
Below are few of the bias that you should stay away from :
As Warren Buffet said, “We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” Decision-making is in the locus of our control. We have the power to break patterns of behavior simply by making better decisions.
As Warren Buffett said, “We don’t have to be smarter than the rest. We have to be more disciplined than the rest”. Decision-making is in the locus of our control. We have the power to break patterns of behavior simply by making better decisions. The truth is it’s very rare for humans to make a genuinely logical, rational decision.
But a brief period of mindfulness will help you tackle psychological biases hands on. Relying on reflexive decision-making (going with your gut) makes us more prone to deceptive biases and emotional and social influences. Establishing logical and methodological decision-making processes can help protect from such errors. It is important to be focused on the process rather than the outcome.
We at TBNG understand that person’s behaviour has the ability to affect their performance & we consider it as our duty to help you understands the emotions and feelings that affect a person’s ability to make prudent financial decisions .As your financial life not only affects you but also your loved ones. Thus, minding your behaviour is a key aspect that is taught by a financial personal coach.