Availability

Availability is another member of the long list of cognitive errors that can affect your trading and investing performance. This happens because people are more likely to remember events that are recent, easy to remember, or relevant to them. For example, in a famous...

How to value a REIT

REIT valuation is a very important task when you want to invest in REITs. Why? Because your objective should be to accumulate shares of good REITs at a good value. But what is a good value?Usually, there are two approaches to evaluate a REIT:absolute valuation: a fair...

Conservatism

Conservatism is an example of a cognitive error that can affect your decision-making process. How? It happens when one maintains his/her prior view by inadequately incorporate new information. This, as you may already have realized, can be very dangerous when it...

Regret-aversion bias

The regret-aversion bias is related to another emotional bias we have discussed recently, i.e., the loss-aversion bias.Have you ever avoided to make a decision out of fear that it will turn out to be a bad decision? Yes? Then you are a victim of the regret-aversion...

Self-control bias

The topic this time is the self-control bias, that like the loss-aversion bias belongs to the emotional biases category.The self-control bias identifies a situation where people cannot achieve their long-term goals for a lack of self-discipline. The classic example is...

Loss-aversion bias

In this article we discuss the loss-aversion bias, that can be quite dangerous in trading. If you remember the previous article about behavioral biases, we defined two categories, i.e., emotional biases and cognitive errors. The loss-aversion bias belongs to the first...