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27
May
some of your biases could be causing you financial harm
- present bias: tendency to overvalue immediate smaller rewards at the expense of long-term goals
- base rate neglect: tendency to ignore the probability of something happening and instead judge its likelihood by new, readily available information
- overconfidence: tendency to overweigh one’s own abilities or information when making an investment decision
- loss aversion: tendency to be excessively fearful of experiencing losses relative to gains
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