In investing (and in life), we like to believe we act rationally. But we don’t always make decisions for the reasons we think. The field of behavioural economics has proven there are social, emotional and even cognitive factors that can get in our way. By becoming aware of these tendencies – or biases – we stand a better chance of meeting our long-term investment goals.
Herding is what happens when we follow the crowd—even when the crowd may be doing something kind of nutty. Like spending more for a tulip than they’d spend on a house. Find out why “but everyone else is doing it” may be a great reason to do something else.
