What is the impact of Action Bias and why more activity does not bring better results?

Definition: Action bias is the tendency to prefer taking action over inaction, even without evidence of better outcomes. It is an automatic response, similar to a reflex, and not based on rational thinking.

What is Action Bias? One of the most detrimental biases that can hinder investment returns is the tendency to act for the sake of acting. I have personally experienced the effects of action bias in my business, investing, and personal life. To illustrate the concept of taking action when it is unwarranted, I will share… Continue reading →

Here are the most popular Investor Biases to avoid.

Investor biases can be categorized into two types, cognitive or emotional. These biases are irrational thoughts and feelings that affect our decision-making, whether subconsciously or consciously. An investor can have one or multiple biases that lead to misjudgments. Recognising our behaviours and biases is essential to becoming a better investor, but we cannot wholly eliminate them. Instead, we can identify them and put measures in place to overcome them

What are behavioural biases? Investor biases can be categorized into two types, cognitive or emotional. These biases are irrational thoughts and feelings that affect our decision-making, whether subconsciously or consciously. An investor can have one or multiple biases that lead to misjudgments. Recognising our behaviours and biases is essential to becoming a better investor, but… Continue reading →