Question

How does psychological biases lead to poor investment decisions. How will these practices improve investment decisions?

minimum 150 words

Answer 1

Psychological biases means when investors way of thinking affect their behavior that what he want to invest.hence its bascially his mental attitude which decide what to invest and what not to.psychological biases leads to poor investment decision become sometime due to overconfidence or due to lack of knowledge investor invest huge amount in investment and which leads to poor investment decision.when a person takes investment decision on the basis of emotions then it may get worse.sometime a person trust on the resource so blindly then he never try to check the accuracy of data.

Psychological biases improve investment decision when their detailed investigation has be done for checking accuracy of data.when a person take decision on the basis of his mental work.when he try to collect competetive data from other sources.hence a detailed strategy is always good for all.when mental accounting occur and confirmation has be done.then it can be good .