Are Biases Hindering Your Returns?

Gut feelings and snap decisions are not always right.

Sunniva Kolostyak 10 June, 2021 | 8:00
Facebook Twitter LinkedIn

Painted silhouettes of people

We love shortcuts. Whether using CTRL+C/CTRL+V for copy and paste or finding the shortcuts, we are always looking to optimise how we spend our time and energy. Our brain does this too; without using any mental capacity, we know to buy low and sell high, and we make thousands of other decisions based on heuristics, or shortcuts, where the answer just feels right.

But these shortcuts can also lead us astray – and that is when they become biases. A Morningstar study looking at the importance of behavioural biases when making investment decisions found that relying on intuition often leads to investment errors. What’s more, “The Financial Impact of Behavioral Biases” study found that 98% of people in the U.S. exhibit at least one bias.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Member.

Register For Free
Facebook Twitter LinkedIn

About Author

Sunniva Kolostyak  is data journalist for Morningstar.co.uk

© Copyright 2021 Morningstar Asia Ltd. All rights reserved.

Terms of Use        Privacy Policy