The impact of social influence on investment decisions from "summary" of Beyond Greed and Fear:Understanding Behavioral Finance and the Psychology of Investing by Hersh Shefrin
Humans are social beings, influenced by the opinions and actions of those around them. This is also true when it comes to investment decisions. Individuals often look to others for guidance on how to invest their money, seeking validation and reassurance from their peers. This social influence can have a significant impact on the choices people make when it comes to their investments.
The fear of missing out on a good opportunity or the desire to be part of a successful group can lead individuals to make investment decisions based on the actions of others, rather than on their own analysis and research. This herd mentality can cause people to follow the crowd, even if it goes against their better judgment.
Social influence can al...
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