There are as many different approaches to making investment decisions as there are colors of the rainbow, but they all share a few common elements. At Flourish, we embrace an aspect called behavioral finance, which explains how personal influences and biases affect the financial behavior of investors. Behavioral finance is a relatively new concept, and the study of human emotions and financial decision-making is still evolving. However, an important development has been that, despite our best intentions, we are not able to make rational investment decisions without being influenced by three broad categories of biases: representativeness, anchoring, and availability.
Check back next week for more Flourish Insights with Jay Pluimer and don’t forget to check out our insights blog at https://www.flourishinsights.com
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