08 Sep Cognitive Dissonance
Curious Investor Behaviour – Number 9
When there is a conflict between our beliefs and reality, we tend to rationalise irrational behaviour.
Cognitive dissonance was first observed by Leon Festinger, a psychologist who studied a cult which believed that the earth was going to be destroyed by flood. When the flood didn’t arrive as expected, the cult leaders re-interpreted the evidence to prove that it was their faith and prayers that saved the world.
Investors, too, are often guilty of engaging in similar self-deception – do you ever find it difficult to let go of an idea or a stock that you’re attached to?
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About Reuben Zelwer
Reuben Zelwer established Adapt Wealth Management in 2011 to help time poor clients achieve financial freedom. For over 15 years, Reuben has helped professionals, executives, business owner and those approaching retirement make the most of their circumstances by making good financial decisions. Reuben’s professional practice is complemented by substantial voluntary work, which has included setting up financial literacy and savings programs in the local community.