These 3 mistakes can cost investors money during a crisis, behavioral finance expert John Forlines III says. investinyou (In partnership with acorns.)
It's been a wild start to 2020 for anyone keeping track of their portfolios.
And according to behavioral finance expert John Forlines III, a professor at Duke University, moments like these are where vulnerable investors will make their biggest mistakes. Forlines says that people tend to put off decisions until the last minute and, especially with investing, rush in at the wrong time.
He says these decisions will be made even worse by another human tendency: "availability bias." Simply put, that means humans tend to overvalue the importance of recent events. This can lead to an investor chasing headlines at the expense of their long-term strategy. Forlines says having a plan and sticking to it is the best way to reach rational decisions. Check out this video to learn the other major mistakes investors make and how to correct them.
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