Instinctive reaction is easy to make you lose money. Investors must be vigilant!

Haidu Investment Development Co., Ltd. reminds you that as an investor, you must learn psychology. Many investors think that they have excellent psychological qualities, but this is only a superficial understanding.

Investors must be alert to psychological bias and avoid falling into such bias. The following are 8 psychological biases that investors are vulnerable to.

Always make simple choices

Some facts are: if you think it is easy to have a choice, you are more likely to choose it. But when people have a lot of technical information about investing in mutual funds, and the fund has fallen a lot from before, people's subjective consciousness is even less willing to invest in this fund. In fact, this is usually a good time to invest in such funds.

Short-term thinking

The basis of short-term thinking is personal short-sighted behavior. Especially in the investment process, short-term behavior is entirely speculative. Short-sighted thinking will make investors frequently enter and exit the market.

Can't get rid of recent events

The stagnation of human thinking can lead to errors in investment judgments. For example, during the 2008-2009 financial crisis, many investors focused on protecting their assets from another market crash, rather than seizing opportunities to profit after the market stabilized.

Overconfidence

In terms of investment, this overconfidence can lead to many problems, such as overly concentrated investment portfolios, or investing in predicting market development instead of insisting on long-term investment plans.

Confirmation bias

This confirmation bias is very similar to overconfidence. When confirmation bias is dominant in consciousness, you will grab any information to confirm your own thoughts.

Unacceptable loss

Almost all of us have experienced some degree of investment loss and hate this loss. And this mentality continues to cause investors to stick to their own loser mentality. In order to avoid investment mistakes again, they even stay away from the investment market.

Herd mentality

If everyone is doing something, the market will look vibrant. On the surface, this is easy to understand, even without much explanation. But in terms of investment, the situation is quite the opposite.