Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
Charu Chanana
Chief Investment Strategist
Access all our platforms from a single account.
Need To Know: 4 Investment Biases
Mind Over Money key principles
Saxo Group
Summary: It is not just your emotions that can influence investment activity, but innate biases that you may not realise you have. Biases can affect investments as they are often predetermined. They may also result in investors acting on a gut feeling rather than conducting rational analysis.
Here are 4 common cognitive biases you should be aware of, so you can overcome them quickly and efficiently:
Gambler’s Fallacy
Gambler’s fallacy is a bias where an individual believes the likelihood of something happening becomes higher or lower as an event or process is repeated. Let’s say an investor continues to increase their position in a stock despite witnessing repeated and mounting losses. This investor believes that the stock price will most likely change direction as losses continue to increase, but this mentality is incorrect. Each event is independent, and there is no correlation between past and present occurrences.Confirmation Bias
Confirmation bias is another common cognitive bias where you look for, believe, or favour information that supports/confirms your pre-formulated values or beliefs. Investors may also intentionally ignore information that contradicts these values and beliefs. For example, if you are steadfast in owning shares of a company, such as Tesla, Amazon, or Alphabet, and you may ignore unfavourable news about that particular company’s quarterly reports, you are committing a form of confirmation bias.Representative Bias
Repeating investments for no other reason than because they previously brought you success, is an example of representative bias. Another example is if you believe an investment is good or bad based on a company's past performances. Let’s say a business you have invested in releases a strong earnings report. You may assume that the next earnings report will be just as strong, but, as you now know through the gambler’s fallacy, past events don’t change the likelihood that certain events will occur in the future.Status Quo Bias
Like representative bias, status quo bias means you are conducting old investments or using old strategies rather than exploring new options. If you are using old methods to execute new investments, you may be blinded by your perceptions and cannot recognise that the market has changed and your old strategies are not viable.Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Commodity Outlook: Commodities rally despite global uncertainty
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Upending the global order at blinding speed
John J. Hardy
Global Head of Macro Strategy
We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ... -
Quarterly Outlook
Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever
Jacob Falkencrone
Global Head of Investment Strategy
-
Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
-
Quarterly Outlook
Equity Outlook: The ride just got rougher
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
China Outlook: The choice between retaliation or de-escalation
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: A bumpy road ahead calls for diversification
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX outlook: Tariffs drive USD strength, until...?
John J. Hardy
Global Head of Macro Strategy
-
Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy