Investor Behaviour

This temptation has a name: recency bias! It is the tendency to weigh recent events more heavily than earlier events. In simple terms, it is assuming that because it rained heavily yesterday, it will definitely rain heavily today. Well, it may or may not.

Human brains are ancient survival machines. For our ancestors, losing a food source was a direct threat to survival, far more critical than finding an extra one. This "better safe than sorry" programming is still active, causing us to overreact to any perceived threat—including a temporary drop in our portfolio value. Imagine you find a crisp ₹500 note on the street. It feels good. Now, imagine you lose a ₹500 note from your wallet. The feeling of frustration and annoyance is