Anchoring bias The cognitive bias of anchoring is when your decision is influenced by the first thing you heard, saw, or read. It is the reference point or anchoring point on where your future decisions are made. Let me give you a simple example. You want to buy a plain cup of coffee to go … More Anchoring Is Just Dead Weight
To sell or not to sell, that is the question. Whether tis nobler in the mind to sell your losers and gain some tax advantages or suffer the sling and arrows and hope for a rebound in the new year. Lost in Semi-Crypto Let me tell you, I feel the pain of loss aversion and … More Taking Stock of Your Stocks at EOY
I have invested in poorly managed companies or companies that have never made money, but I made a great return on them. And there are good companies that make great investments. It comes down to risk and reward, risk tolerance, and is your focus on short-term or long-term goals. Let’s first define what a good … More Why Good Companies May Not Be Good Investments
The sunk cost effect considers past non-recoverable costs, time, or resources in deciding the future. In other words, whatever effort, money, or time you have put into an investment does not matter when looking at the investment in the present and predicting the future. The sunk cost effect varies by the cost or effort put … More Don’t Let Sunk Costs Sink Your Finances
If you believe in the efficient market theory (EMT), which states that the current stock price reflects all important information, whether known or unknown to the investor, then the only way to make money on the stock market is through speculation or buying on luck. This is the rational explanation of the market if everyone … More Option Trading Tip to Profit from Uncertainty
Let’s be honest. When investing, we all love to win and tell everyone what a great investor you are. You love to tell a story of how you found this stock put in $100, and then made $10,000. Of course, you don’t tell them the other story where you put in $100, and the stock … More Top 4 Emotions to Control for Stock Investing
Behavioral Investing and Finance 