Recency bias causes investors to focus on recent events rather than longterm trends from "summary" of The Little Book of Behavioral Investing by James Montier
Recency bias is a common affliction for many investors. It causes individuals to place more emphasis on recent events rather than considering the broader, long-term trends that may be at play. This bias leads to a narrow focus on what has just happened, instead of taking a step back to see the bigger picture. Investors who fall victim to recency bias may make decisions based on short-term fluctuations rather than looking at the overall trajectory of an investment. When investors are influenced by recency bias, they may overreact to the most recent news or market movements. This can lead to impulsive decis...
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