#3 - Loss Aversion: Exploring and Refuting Common Investor Behavioral Biases
The idea of guaranteed loss at some point over the life of an investment can lead to loss aversion among investors.
The idea of guaranteed loss at some point over the life of an investment can lead to loss aversion among investors.
How confident are you in being right? If you’re like most individuals, you’re correct only 80% of the time when you believe you’re at least “99% sure” of being right. (Source) Neuroscientist Tali Sharot presented an excellent TED Talk on the subject of optimism bias in Long Beach, California in 2012.
By definition, confirmation bias “occurs when people filter out potentially useful facts and opinions that don’t coincide with their preconceived notions.”
