In Conversation With Shriram G R – Senior Vice President – Retail Sales, Tamil Nadu, IDFC Asset Management Company Limited
Decoding Behaviour Biases will help investors to stay the course during their investment journey The above interactive video will throw live examples of some of the cognitive biases which exist in human minds and it is important that the investor takes the right decision with the help of a financial advisor while planning their financial goals.
1. Confirmation bias: It is the tendency to listen more often to information that confirms our existing beliefs. Seeing facts as they are is more important rather than what we perceive.
2. Hindsight bias: This bias focuses on forecasting the feature even though the future is unknown. Past returns (or) past events make people take an unwise risk (or) being overprotective. Choosing funds based on past performance is a classic example of this.
3. Anchoring bias: Sometimes people get overly influenced by the first piece of information that they hear. This will not give them a holistic picture and it is best to avoid them. Negative Events shown with a greater focus in the media will prevent people to make an investment decision and thereby miss the big picture (which is their long-term goal in investments).
Knowing these behavioural biases will help the investor not to get influenced by them and make them take an informed decision with the help of a Financial Advisor.
Watch Video
