How The Action Bias Trips Up Investors?

Your behaviours, perhaps more than anything else, will affect the long term returns that you’ll earn from your investments. A wide variety of literature on the subject of behavioural investing has led to increased awareness on the topic in recent times – but as any investor will confirm, knowing and doing are two different beats altogether! Perhaps one of the most common biases that plague investor behaviour is the ‘Action Bias’, or the constant itch to do something with your investments. Here are five common ways in which this bias…

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3 Triggers For The Action Bias

“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring”. This quote by Billionaire Fund Manager George Soros perfectly sums up the perils of the “Action Bias”. Put simply, the Action Bias is the natural human tendency to go out there and “do something” with our investments, with the mistaken belief that the action taken will most likely have a positive outcome, in the form of enhanced returns. However, this most often ends up having the exact opposite effect. Most investors succumb…

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Investor – Don’t Succumb To The Action Bias!

From goalkeepers to Wealth Managers to individual investors, it would appear that the clear majority of us stand uninsulated against our own innate tendency to spring into action at the drop of the hat. This behavioral bias, known as the “Action Bias”, has scarred many an investor over the years. In other words, we love quick results just as much as we love instant noodles. And not just that; we loathe to be seen ‘doing nothing’ with our investments. It wouldn’t be unfair to say that today’s mercurial investor suffers…

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