The answer probably lies in a trait known as anchoring which means that in the face of uncertainty, we will cling to any irrelevant number as support. The core root of this inability seems to lie in the fact that we all seem to be over-optimistic and over-confident. But an enormous amount of evidence suggests that investors are generally hopeless at it. Sin 1: Placing forecasting at the heart of the investment processįorecasting is an integral part of our lives. Though penned almost a decade ago, the advice is timeless and has not diminished in value over the years. The basic crux was to look at how behavioural finance can impact the investment process. Years ago, James Montier, then with Dresdner Kleinwort Wasserstein, came out with a whitepaper titled “Seven Sins of Fund Management”.
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March 2023
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