Behavioral finance and its impact on decision-making - Finance Not Taught In School

Behavioral finance studies often not taught in school, explores how psychological biases influence financial impact investment choices, often deviating from rational economic models. Common biases include loss aversion, overconfidence, and herd mentality. These biases can lead to suboptimal decisions, such as buying high during market euphoria or selling low in panic.

Understanding behavioral finance helps investors recognize and mitigate these biases, promoting more informed and disciplined decision-making. By acknowledging the human element in finance, individuals can better navigate markets and achieve their long-term financial goals decision-making. It explores how emotions, cognitive errors, and social factors affect financial decisions.

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