‘Cognitive bias’ has become a bit of an investing buzzword in recent years.
The theory is that the human brain makes errors of judgment that can lead us to be emotional, short term and come to other incorrect conclusions.
Cognitive bias has been of particular interest to the investing community and a long lists of biases – confirmation bias, anchoring, the recency effect and dozens of others have now been well documented.
This Vanguard article explores how these biases can affect our investment decisions.
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