Behavioral Finance Reckons With Bulls, Bears and Biases

Behavioral Finance Reckons With Bulls, Bears and Biases

FINANCE: Advisors Take Emotional Baggage Into Account With Clients

By SARAH DE CRESCENZO

San Diego — It’s the phone call that wealth managers dread when the stock market is bearish and investors are restless…  Someone who hears a radio segment on the way to work during which a tech firm CEO raves about Tesla, say, and decides to put their retirement savings into that company’s stocks has fallen victim to the anchoring bias, which tricks us into relying heavily on one piece of information (our “anchor”) over others that may be just as pertinent… They may fall victim to the illusion of control bias: overestimating how much they can or are impacting the course of events…

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