Quality of the portfolio suffers due to over diversification
Over diversification is an aspect of portfolio building where investors usually end up adding an unnecessary number of stocks and/or mutual funds. An excessively diversified portfolio is invested in so many different vehicles or so many different asset classes that it limits the possibility of higher gains for no additional reduction in the levels of […]
Anchoring
Anchoring is a concept in behavioral finance where a person’s decision making ability is anchored in some past event. For example an investor today stays shy of investing because his mind is anchored in the 2008 stock market crash. He cannot think beyond. Thinking Man suggests that in investments our decisions should be always future […]