- Emotions: Fear, greed, and other emotions can cloud judgment and lead to impulsive or irrational decisions.
- Confirmation bias: This occurs when we only seek out information that confirms our existing beliefs and ignore information that contradicts them.
- Anchoring bias: This occurs when we rely too heavily on the first piece of information we receive and fail to consider other possibilities.
- Overconfidence: Believing that we are more skilled or knowledgeable than we actually are can lead to poor decision making.
- Lack of diversification: Focusing too heavily on one particular market or investment can lead to excessive risk and poor performance.
- Limited information: A lack of accurate and up-to-date market data can lead to poor decision making.
- Noise: The overwhelming amount of information that is available can make it difficult to differentiate between relevant and irrelevant information.
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