For those who don’t know Kahneman and Tversky, they were psychologists who studied how people make decisions under uncertainty. They showed that humans often rely on biases and shortcuts instead of rational thinking, shaping the field of behavioral economics.☺️

Hello!!! Let me tell you something…

Kahneman and Tversky argued that the human mind operates through two systems of thinking. System 1 is fast, intuitive, and emotional, while System 2 is slow, logical, and analytical.
In the world of investing, most people tend to rely mainly on System 1, reacting impulsively to market fluctuations. Research shows that a loss of a certain amount generates twice as much negative emotion as the pleasure caused by an equivalent gain.
As a result, when prices drop, many investors panic and rush to sell. In contrast, an experienced investor activates System 2—staying calm, thinking analytically, and making more rational decisions—and ultimately comes out ahead in the long run.
Next time, think before you act.😉😉
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#psychological #decisions