Investors Beware: Overconfidence and Herding Biases Impacting Investment Decisions
The article reviews research on how people's behavior affects their investment decisions. It focuses on two common biases: overconfidence and following the crowd. The researchers looked at 109 articles published between 1980 and 2022 to see how these biases impact individual and institutional investors. They found that individual investors tend to be more overconfident, while institutional investors are more likely to follow the crowd. This research can help investment advisors better understand and manage these biases when choosing stocks for their clients.