The mental shortcuts and emotions — loss aversion, herd behaviour, FOMO, overconfidence — that quietly shape money decisions, and practical ways to notice them.
Most investing mistakes are not maths mistakes. They come from predictable habits of mind: feeling a loss about twice as sharply as an equal gain, anchoring on the price you paid, following the crowd into whatever rose most last year, or trading more after a lucky run. Behavioural finance research has studied these patterns for decades, and they show up in Indian markets as clearly as anywhere.
Each article in this section names one bias, explains the research behind it in plain language, shows how it tends to appear in real decisions — holding a falling stock, chasing a hot IPO, panic-selling in a correction — and ends with practical checks you can use before acting. The paper-trading simulator is a safe place to notice these reactions without real money at stake.
Losses tend to weigh on us far more heavily than equal-sized gains. Understanding this asymmetry explains a lot of investing behaviour — from stopped SIPs to stocks held for years at a loss.
When a stock, IPO, or coin is suddenly everywhere, the pull to join in can feel overwhelming. Here is why following the crowd feels rational, when it stops being so, and how to slow the impulse down.
Most of us believe we are above-average drivers, cooks, and investors. In markets, that belief tends to show up as frequent trading — and the research on what frequent trading does to returns is sobering.
A number you saw first — what you paid, last year's peak, an IPO price — can pull every later judgement towards it, even when it has nothing to do with what an investment is worth today.
We give the most recent experience far more weight than it deserves. In markets, that means piling into whatever just did well and staying away from whatever just hurt.
Many investors book profits quickly and sit on losses for years. Research has documented this pattern for decades — here is why it happens and how to check whether it is shaping your own portfolio.
A rupee is a rupee, yet we put money into mental jars with different rules. That habit can help with discipline — or quietly cost us when the jars contradict each other.
Once we own something, we tend to seek out news that says we were right and skim past anything that says we were wrong. Social media and group chats can turn that tendency into a closed loop.
Money and effort already spent cannot be recovered by the next decision — yet they often dictate it. Here is how the sunk-cost trap appears in investing, and how to make forward-looking choices.
You cannot remove biases by willpower alone, but you can decide in calm moments how you will act in stressful ones. A written plan, cooling-off rules, and a short checklist do much of the work.