We don’t see things as they are; we see them as we are.”
— Anaïs Nin
Narrow Framing Bias:
Narrow framing means taking a decision without considering all the factors that can affect a particular decision.
Mr. Harshil wants to buy a Phone the only factor that he thinks of is the brand though there are other reputed brands which in the same range gives more enhanced feature but his narrow thinking restricted himself to one brand thus it can be that he ends up paying more for less features.
Narrow Framing Bias in Investing:
An investor is said to be suffering from NARROW FRAMING when he makes an investing decision without considering his entire portfolio.
Mr.Mukesh has his monthly SIP going towards sector specific Technology fund; he believes that technology now-a-days is the back-bone of every business thus he increases his investment towards technology fund without analyzing that his overall portfolio is already overweighed towards Technology sector.
Thinking Man Advice:
Before making any new investments do analyze your past investment.
Have a broader view while taking any decision i.e. portfolio risk & return.