Education and experience do not always prevent behavioral biases from "summary" of Beyond Greed and Fear:Understanding Behavioral Finance and the Psychology of Investing by Hersh Shefrin
One might think that with education and experience, individuals would be able to avoid falling prey to behavioral biases. However, this is not always the case. Even well-educated and experienced professionals can succumb to these biases, leading them to make irrational decisions when it comes to investing. The reason for this lies in the fact that our brains are wired in a way that makes us susceptible to these biases, regardless of our level of education or experience. These biases are deeply ingrained in our psychology and can influence our decision-making process without us even realizing it. Education and experience can certainly help individuals recognize these biases and take steps to mitigate their impact. However, they are not foolproof defenses against them. In fact, sometimes, individuals who are highly educated and experienced may be even more susceptible to certain biases due to overconfidence in their abilities. It is crucial for investors to be aware of the existence of these biases and to actively work towards overcoming them. This requires a deep understanding of one's own thought processes and a willingness to challenge one's own assumptions. By staying vigilant and constantly questioning their decision-making process, investors can hope to avoid falling victim to behavioral biases, no matter how educated or experienced they may be.
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