Individuals are imperfect and will continue to be prone to biases. The key to success in markets is to first acknowledge the existence of biases, and then put in place processes to manage biases, especially at exits
Investors often operate based on emotional biases than long-term fundamentals.
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China recently eased restrictions under the Zero Covid policy and is reportedly going through a large Covid-19 wave. This has started causing concerns amongst financial market participants, which highlights a very important aspect of investor behaviour. Investors often operate based on emotional biases than long-term fundamentals.
[This article has been reproduced with permission from SP Jain Institute of Management & Research, Mumbai. Views expressed by authors are personal.]