Cognitive Biases That Cost Investors Money

Key Takeaways

• Anchoring bias causes fixation on listing prices; always start your analysis from comparable sales data, not the asking price.
• Confirmation bias and loss aversion drive emotional purchasing decisions — seek disconfirming evidence for every deal.
• Recency bias leads to dangerous extrapolation of recent trends; remember that markets are cyclical.
• Systematic debiasing tools include written criteria, standardized spreadsheets, 24-hour cooling periods, and accountability partners.