Economists and psychologists have conducted studies to determine whether investors always act rationally. They don’t. A number of persistent patterns of irrational investor behavior have been identified, including overconfidence, hindsight bias, short-term focus, regret, mental accounting and the hot-hand fallacy. We all tend to make these mental mistakes but can avoid them once we become aware. With this writing we… Read more →
Tag: Investor Behavior
Investor behavior.
A study done by Dalbar, Inc., a financial services research firm, found that most investors who move in and out of their investments have a much lower long-term total return than those who employ a buy and hold strategy. The study, entitled the Quantitative Analysis of Investor Behavior, examines real investor returns from January, 1984 to December, 2000. Read more →