5 Ways Your Mind Plays Tricks on Your Stock Trades

Stock investing is just as much about not losing money, and these five behavioral investing mistakes will cost you thousands of dollars. I’ll show you how investing works and how your brain plays tricks on you. Then I’ll reveal how to beat these bad investing biases and behavior mistakes. 🤑 Get The Daily Bow-Tie - my FREE daily email newsletter sharing market updates, trends and the most important news! Market Updates for the Smart Investor! https://mystockmarketbasics.com/dailybowtie YOU are your own worst enemy when it comes to investing. Humans aren’t set up to seek risk, we naturally avoid it as a survival instinct. So when we go to invest our money, which is inherently risky, our brains make all kinds of behavioral mistakes and can play tricks on us. If you’re ever going to invest in stocks AND not lose your money, you need to master these five cognitive biases and bad investor behaviors. Don’t worry though, they all have fancy psychological names but I’m going to explain each one and give you examples so they’re easy to understand. Whether you’re investing as a beginner and want to start investing or you already know how investing works, you need to watch this video! 📊 Download this Portfolio Tracker and Investing Spreadsheet! [Community Discount Code] https://mystockmarketbasics.com/spreadsheetdiscount We’ll start with the Loss Aversion Bias in stocks, the behavior that makes you sell your winning stocks too fast and hold on to losing stocks way too long. The problem is people REALLY hate losses, even more than they like to win. Investors avoid losses by not selling and even buying more of a bad stock. The losses pile up and you don’t make enough in your best stocks to cover the lost money. Investor overconfidence is actually a behavior that gets worse with more experience investing in stocks. The research and time spent stock investing makes you think you’re smarter than you are in picking stocks. Then you end up not doing as much research, you get overconfident and just go with your gut on trades…and you lose money. Hindsight bias is the biggest cause of FOMO or fear of missing out in stocks. You remember all the great investments you didn’t buy and how much money you could have made. When the next get-rich stock comes along, you can’t resist going all-in. That’s gambling and it’s not how investing works! The problem is with hindsight bias is that you don’t remember the stock recommendations you didn’t take and that lost money. Your memory is skewed to the winners. Confirmation bias and availability is a bad one not just for investors but for everyone right now. We only see what we want to see, whether it’s in the news or on social media. That only confirms our opinions about an investment and we think it’s a sure thing. Anchoring bias is one you don’t hear quite as much in stock investing but it’s just as bad. This is where you form an opinion on a stock or data and even when contradictory information comes out, you don’t move your opinion very much. Your estimate for a stock price is ‘anchored’ by that prior opinion. 3:08 Aversion Bias 4:50 Investor Overconfidence 7:26 Hindsight Bias 9:41 Confirmation Bias and Availability 11:10 Anchoring Bias My Investing Recommendations 📈 Check out the stock simulator and Get a FREE share of stock worth up to $1000 when you open a Webull investing account with a $100 deposit! 🤑 https://mystockmarketbasics.com/webull Follow the 2021 Bow Tie Nation portfolio on Stockcard and get a special 10% discount with promo code: bowtienation https://mystockmarketbasics.com/stockcarddiscount Free Webinar – Discover how to create a personal investing plan and beat your goals in less than an hour! I’m revealing the Goals-Based Investing Strategy I developed working private wealth management in this free webinar. Reserve your spot now! https://mystockmarketbasics.com/free-investing-webinar SUBSCRIBE to create the financial future you deserve with videos on beating debt, making more money and making your money work for you. https://peerfinance101.com/FreeMoneyVideos Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps. #investing #stockmarket #investor