Stay Aware Of Your Recency Bias

Giving in to recency bias related to an event like the Union Budget is akin to speculating. Asking the right questions before biting the bullet is very important If there is something you should know about investment behaviour it is this one single fact that it is the same across every market in the world. Similar patterns are witnessed across races and nationalities, and it has been played out across centuries. That is so because human nature is a constant. Beneath all the superficial characteristics of humans, we are the same, a trait also observed by Voltaire: “When it comes to money, everyone is of the same religion”. When it comes to the stock market, you should know this. Fear sells and excitement buys. And every single mania in history has revolved around this. Be it the Tulip Mania (1637), the Mississippi Bubble (1720) or the South Sea Bubble (1720). More recently,...