Investing Psychology: Do you make this mistake? Recency Bias

[00:00:00]What psychological biases do you have as an investor? Well, one of those is called recency bias. This basically means recent experiences carry more weight in our minds than experiences which happened a long time ago. A prime example of this could be, let's say, 9/11.

[00:00:17]During 9/11, let's say just after, you may think, "Okay, there's going to be way more terrorist attacks in the US."

[00:00:24]When in fact, that was actually one of the safest times to fly as security and everyone was at was at a much higher level of vigilance.

[00:00:33]So, we could even apply this same principle to stocks and cryptocurrency and any asset. Let's say an asset has been running up in value and we think, "Okay, it's going to continue that trend based on our recency bias." When in fact, usually if that momentum has been exhausted, it's more likely to mean reverts. So, follow for more AI-powered investing insights, where we filter the signal from the noise.