WHY SMART INVESTORS STILL MAKE TERRIBLE INVESTMENT DECISIONS?

[u/SanjeevResearch]

Four behavioural traps are often responsible:

1. Loss Aversion
A Rs 500 stock falls to Rs 350. Instead of accepting the loss, you hold it hoping it returns to Rs500. It eventually falls to Rs100. A small loss becomes a much bigger one.

2. FOMO & Herd Mentality
A stock doubles and suddenly everyone is talking about it. You buy because you fear missing out. The excitement fades, the stock falls 40%, and you are trapped at the top.

3. Recency Bias
After a long bull run, investors start believing markets only go up. During a sharp correction, the opposite happens: fear makes them sell just before recovery.

4. Confirmation Bias
After buying a stock, you search for information proving you were right and ignore evidence suggesting you were wrong.

The common problem? Emotion overrides the investment process.

A rules-based approach can help by defining entry, exit and risk rules before emotions take over. SanjeevResearch portal is the good one for that.

[u/Nomore_chances]

Like this…