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  • Behavioral Finance and Biases and Identification Questions

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    Amad Faisal
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    This document discusses several common behavioral biases that can impact investment decisions and asks clients to indicate their level of agreement with statements relating to each bias, including confirmation bias where one seeks information agreeing with their views, availability bias where recent information is relied on heavily, and loss aversion bias where losses feel much worse than equivalent gains. It also mentions overconfidence bias, recency bias, herding bias, and anchoring bias.

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    Behavioral finance and biases and identification questions

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    This document discusses several common behavioral biases that can impact investment decisions and asks clients to indicate their level of agreement with statements relating to each bias, including confirmation bias where one seeks information agreeing with their views, availability bias where recent information is relied on heavily, and loss aversion bias where losses feel much worse than equivalent gains. It also mentions overconfidence bias, recency bias, herding bias, and anchoring bias.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    6 views1 page

    Behavioral Finance and Biases and Identification Questions

    Uploaded by

    Amad Faisal
    This document discusses several common behavioral biases that can impact investment decisions and asks clients to indicate their level of agreement with statements relating to each bias, including confirmation bias where one seeks information agreeing with their views, availability bias where recent information is relied on heavily, and loss aversion bias where losses feel much worse than equivalent gains. It also mentions overconfidence bias, recency bias, herding bias, and anchoring bias.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Behavioral finance and biases and identification questions

    Ask clients, “How much do you agree or disagree with the statements on the right?”

    Confirmation bias I generally read articles, visit website or


    watch TV shows whose information I
    agree with.
    Availability bias I tend to rely a lot information that I read
    or heard recently
    Overconfidence bias with my portfolio management skills I’m
    sure can outperform the market
    loss aversion bias I tend to feel really bad after a loss. Gains
    don’t excite ,me much. However
    recency bias sometimes I make an investment decision
    right after a big news event or emotional
    experience
    herding bias I find out how other people are investing
    and try to do something similar
    anchoring bias if I bought shares of stock at $160 and
    the price went down, I Wouldn’t sell until
    it reached $160 again
    Source cerulli associates, october 2021

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