Article preview: How much do the investment decisions you make cost you in lost returns? Many of the investment decisions made by investors for the purposes of ‘emotional comfort’ – and these decisions can be costly. In a new briefing note from behavioural finance experts Oxford Risk, the cost of these decisions made for emotional comfort has been quantified at 3% in returns. However, higher levels of market volatility experienced during the Covid-19 pandemic could have significantly increased the level of emotional decisions made by investors, therefore pushing this cost much higher in some cases.
Emotional comfort investment decisions cost money
This 485-word blog post contains analysis from Oxford Risk seeking to quantify the cost to investors of decisions designed for emotional comfort and also the ‘behaviour gap’ (buy high, sell low). Written on 26th October 2020.
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