Common Behavioural Finance Biases.
Behavioural finance biases can impair our financial decision-making when they aren’t addressed. Two examples of behavioural finance biases are: 1) Anchoring – An over-reliance on the first piece of information you hear, it can influence your perception of an investment’s fair value. Common because comprehensive analysis is seen as difficult and time-consuming. 2) Confirmation bias and commitment bias – Confirmation bias is the tendency to give too much weight to information that supports our preconceptions, while discounting information that isn’t supportive. Commitment bias is being more likely to resist changing your opinion the more people you’ve told about your decision.