Home bias is when investors prefer domestic securities over foreign ones, despite foreign investments being more profitable. This bias can be due to difficulties in buying foreign securities, higher transaction costs, legal restrictions, and national pride. However, diversifying a portfolio with foreign investments can protect against losses in the domestic market. Home bias is a […]
The status quo bias is a cognitive bias that leads people to prefer things stay the same, and it affects decision-making in various fields. Loss aversion is a related concept, and being aware of this bias can help reduce its influence. It can be both helpful and harmful, and can be difficult to break out […]
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