When it comes to money and investing, we’re not always as rational as we think we are, which is why there’s a whole field of study that explains our sometimes strange investment behavior. It is important to control your emotions and avoid self-destructive investor behavior. We call the gap between general market returns and individual investment performance “investor behavior penalty.” It is possible for investors to negatively affect performance due to their numerous behavioral & emotional flaws. Why is this? Greed and overconfidence People generally overestimate their knowledge and their abilities to make financial decisions, either by overconfidence or by […]
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- Jeff Masters
- 4 Aug 2014
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