Why may your feelings prevent you from obtaining your maximum investments

Listen and subscribe to the shares in translation on Apple podcastand SpotifyOr wherever you find your favorite podcast.

For those who closely monitor their investments and trade daily, your feelings are likely to prevent you from seeing more consistent and profitable returns.

Wave HQ Cfo Michaella Gallina has detailed how investor psychology-or emotions, biases and decision-making patterns that affect how people invest-play an important role in a person’s wallet.

The three biases that he pays attention are the negligence of loss, the bias of modernity, and the confirmation bias.

“I think the loss of the loss is great because it is basically the concept that we feel losses as an investor in twice the rate of emotion that we feel cheerful when it comes to gains,” Galina said in one of the stocks on March 4 on March 4 in the translation of the podcast. “I think just realizing these cognitive behaviors is the first step. Understand that you can make emotional decisions and can harm you in exchange for staying in the course in the long term … is always the first step.”

Galina noticed that the loss of loss is the most harmful to many investor portfolios, which leads to a “much more permanent effect” than some other biases that affect trading decisions.

She pointed to the 2024 JPMorgan poll, which was found that 40 % of retail investors tend to sell at the lowest market levels.

“So they feel the losses more,” she said. “Then emotional losses above it are greater. So these emotional fluctuations can really make a terrible decision.”

It is easy for the investor to look at short -term trends in the market and make knee decisions in a reaction to these courses. Galina has argued that adhering to your investments, even by decline, can actually affect you larger and more consistent returns.

Read more: What is negative income, and how can I generate it through investment?

However, Galina noticed that the biases could affect negative strategies. She explained that if you are following the markets, you may hear in the news that should depend on various investment funds. If you decide to sit on the margin with a negative strategy, this may also reflect the bias of modernity or the confirmation bias, as it may depend on modern information or not challenging previous beliefs.

“We tend to be more affected by news and addresses in the short term than long -term directions,” Galina said. “With the development of the market, I can see traders who may think about the negative strategy now because the right thing over time may think differently – or itself.”