Personal Finance Essentials

Herd Mentality Bias

The Psychology of Investing > Herd Mentality Bias

People tend to buy or sell merely because other people are buying or selling.

The problem is that most people are poor investors – meaning following the crowd usually results in poor results. Don’t buy or sell merely because your friend says they are. If everyone were right, everyone would be rich. Whatever strategy you choose, you need a better reason than “the person next to me is doing it.”

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