Archives for February 2012

Virtual Detox of Your Portfolio

Though we would like to think that most of the time we are objective and rational investors, behavioral finance has shown that our brain is not so simple. If left unchecked, our conscious and subconscious biases derail us from rational investment analysis. One such illusion or bias is our tendency to anchor on the price we paid for a stock. While analyzing the stocks in our portfolio, if we own the stock, the price we paid for the stocks is a factor that impacts our analysis of the value of the … [Read more...]