Behavioral Finance

Bad Habits and Good Practices

Topics - Behavioral Finance Asset Allocation

Read Time - 25 mins

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Bad Habits and Good Practices

Good investing results require both good investments and good investors. This report focuses on the second part and addresses some potentially bad habits and contrasting good practices that influence long-run performance.

We discuss three important and prevalent bad investing habits — multiyear return chasing, under-diversification, and comfort-seeking while selecting investments. We hope that identifying these habits and their potentially harmful impact on results can help investors.