This video talks about how emotions and beliefs affect behaviour which influences financial goals. For example fears from traumatic or any other challenging experience such as Covid can influence behaviour even though the situation has changed. He also talks about consumer confidence being low due to information and hindsight bias. Checking the facts will help you overcome your cognitive bias to avoid missing out on opportunities. Hindsight bias is when people predict the present from the past behaviour such as financial hardship to avoid pain. People suddenly have a fear of acting on opportunities due to past challenges which has created a fear. Moreover, people may listen and believe those who tell attractive stories that validate outdated and unhelpful beliefs. This is the halo effect and confirmation bias in action. People who listen to the news to buy shares may miss out on buying undervalued shares as the news may cause them to become overvalued due to following the herd.
Take control of your finances and do the numbers as well as learn about the economy to make sure you are working with helpful thoughts rather than cognitive bias. If you hear about a rumour, do your research before acting.
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AuthorArticles about mental health, money and behavior Archives
February 2024
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