Framing Effect
Framing effect is a behavioral concept in which people react differently to two identical proposals depending on how they are presented. The framing effect is a bias, in which people’s decision for two identical options differs depending on whether it is presented as a loss or as a gain; People tend to avoid risk when a positive frame […]
Just Because Syndrome
Do you plan your weekend trip in advance or just pack your bag and go on an unplanned trip?? An unplanned trip sounds risky right!! Then why doesn’t unplanned finance sound risky? Why does planning your financial future always take a back seat?? Our personal finance decisions affect our life on a daily basis. Future financial […]
Recency Bias in investing
Recency Bias is pretty simple. Just think it this way “your short term memory dominates your long term memory” Usually it is the tendency that what happened in recent past will continue in the future. Consider an example of flipping a coin. We all know that the probability of any of the two possible outcomes in […]
Narrow Framing Bias
We don’t see things as they are; we see them as we are.” — Anaïs Nin Narrow Framing Bias: Narrow framing means taking a decision without considering all the factors that can affect a particular decision. Example: Mr. Harshil wants to buy a Phone the only factor that he thinks of is the brand though […]
Sunk cost fallacy
Sunk cost is a cost that has already been incurred in the past and can’t be recovered. For example: You booked tickets to watch a movie but you caught viral infection, still you went to the movie to justify the money you spent to purchase the tickets instead of taking rest. So, have you justified your […]
Yoga & Investments : Striking Similarities
Did you know that the practice of yoga and investments have a lot of things in common and you could incorporate certain yogic techniques in your financial life to beat the stress associated with it. Discipline – Only if you are fully committed while doing yoga will you be able to reap rewards. Similarly, you […]
Behaviour Biases
At its core, behavioral finance attempts to understand biases in human behavior when it comes to personal finance. It combines social and psychological theory with financial theory as a means of understanding how price movements in the securities markets arises independent of any corporate actions (changes in the intrinsic value of the stock). One of […]
