This session will provide names, definitions, and many examples of how behavioral biases negatively impact financial decisions.
Understanding these biases is the first step to overcoming them and improving performance, and for capitalizing on inefficiencies in the financial markets.
Biases explored include representativeness, availability, overconfidence, anchoring, and loss aversion. We will specifically show how biases influence expectations and forecasts, investment strategies, market prices, earnings revisions and surprises, etc. A comprehensive example of how biases impact an individual’s reluctance to sell losers will be explored, as well as suggestions to improve the decision-making process.
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