Terms

Behavioral Economics

Behavioral Economics

More About Behavioral Economics

  • Investors huge a huge loss aversion which drives bad investment behavior
    • Investors are risk seeking when it comes to losses
      • they tend to invest more when at a loss with hopes of breaking even
      • they are scared to lose on the downside
    • Investors are risk adverse when it comes to gains
      • they tend to take money off the table when they have gains vs. increase the investment
      • they are scared to lose on the update