Overconfidence can be bad for markets and bad for investors. You just need to look at the recent crash in cryptocurrencies to see what can happen when investors believe they simply cannot lose. Yet the reality is that overconfident investors do not really make for good investors. The truth, as revealed by our new research, is that it could actually be down to the positive bias that investors apply to their memories of past performance. Rather than relying on some rose-­tinted memory of past performance, investors could actively review their trading records with their brokers.

Source: The Edge Markets December 19, 2021 03:59 UTC