In our last post, we reviewed five of the most prevalent cognitive biases that trip up amateur and professional investors alike. This particular post is a continuation of that effort, and the third in a series of many behavioral finance posts. When it comes to the world of behavioral finance, emotional biases can be the most crippling, as well as the most frustrating for advisors to see in their clients. Emotional biases generally involve taking action on feelings instead of fact, or making emotionally driven decisions rather than logical ones. What's interesting is that while a cognitive bias may result from having inaccurate or incomplete information, emotional decisions don't tend to be...
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