Psychology influences investment choices from "summary" of Irrational Exuberance by Robert J. Shiller
Investors' choices are not always driven by rational analysis or careful consideration of data. In fact, human psychology plays a significant role in shaping investment decisions. This influence can lead to both irrational exuberance and irrational pessimism in the financial markets. As social beings, humans are susceptible to herd behavior. When everyone around us is buying a particular stock or asset, we may feel a strong urge to join in, fearing that we will miss out on potential gains. This herd mentality can create bubbles in the market, driving prices far above the...Similar Posts
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