Hello, Fellow Investors.
When MarketPsych is not writing books, developing models for measuring Market Emotions, or delivering cutting edge presentations to financial professionals... we're indulging our sense of whimsy by making digital shorts - like the one HERE (or just click video at top of page).
In this one, Jim and Fast Eddie discuss Eddie's latest foray into speculation. But short term plays can quickly turn into long term anchors in portfolios. The main culprit is a lack of discipline and failure to institute a plan. But it's evil partner is called, The Confirmation Bias.
The Confirmation Bias is the tendency to seek out and interpret all information as supporting what you WANT to be right.
We all do it.
The key is to combatting the Confirmation Bias is awareness, and a method for reality-testing that ensures investors are serving rational, financial needs - not emotional ones.
Visit http://www.marketpsych.com/ for more information on the Confirmation Bias... and what you can do about it.
Frank Murtha, Ph.D.