5 Ways Your Brain Tricks You Into Making Horrible Investment Decisions

Studies abound showing how our mental biases thwart sound investing decisions.

Value Stock Guide has compiled the five main ways this happens into a nifty infographic (via Eddy Elfenbein).

You should check out the whole thing, but real quickly, the 5 common ways your brain screws you up are:

  • You do what everyone else is doing because of herd behaviour.
  • You confuse “cheap” with “value.”
  • You throw good money after bad.
  • You practice loss aversion and that leads to bad choices.
  • You think the future is more unpredictable than it is.

Check it out:

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