Investor behavior can often be irrational from "summary" of Random Walk Guide To Investing by Burton G Malkiel
Investors, despite their best intentions, can sometimes make irrational decisions when it comes to investing. This irrational behavior can lead to poor investment choices and ultimately result in financial loss. One common irrational behavior among investors is the tendency to follow the crowd, known as herd mentality. When investors see others buying or selling a particular stock, they may feel pressured to do the same without thoroughly evaluating the investment themselves. Another irrational behavior is overconfidence, where investors believe they have more knowledge and skill than they actually do. This overconfidence can lead to excessive trading and taking on unnecessary risks in the hope of achieving high returns. Additionally, investors may fall victim to confirmation bias,...
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