How portfolios are affected by Recency Bias

• 05 Aug 2020
• Gaurav
• 3 min read

When things are rosy - we think we can take higher risk, because we feel that the future is going to be great and it is “unlikely” that there will be a negative outcome or downside.

Similarly, when things are gloomy – we tend to be more pessimistic and expect the situation to deteriorate further. This often leads to panic and we tend to forget the time horizon that we had planned our investment for.