Anchoring

  • 06 Sep
    How Anchoring Can Destroy Your Returns

    How Anchoring Can Destroy Your Returns

    • You might not be aware of it, but you are under the influence of many things. After all, you are human.
    • Anchoring is really terrible as it makes you take profits too soon and keep your losers. We’ll discuss the post earnings drift effect, loss aversion, and the breakeven issue.
    • Additionally, we’ll discuss 5 ways to eliminate anchoring from your decision making process.

    Introduction

    We’re under the influence of the behavioral finance anchoring concept when we take a past reference point for determining whether a stock is a buy or not. More →