Emotions and investment decision making: An introduction
from CFA Institute's Enterprising Investor
Emotions are an essential part of what makes us human. We achieve some of our greatest accomplishments when we let our passions rule our faculties. But when it comes to investing, emotions can be tricky. Most economic models assume a world in which humans make logical, rational decisions by weighing all the factors and evidence and reasoning out the most sensible choice. But as anyone who ever bought a car or house, ordered a triple cheeseburger or asked someone out on a date knows, situations where we can make logical, rational and emotion-free decisions are all but nonexistent.
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