Behavioural Finance

Hindsight Bias

Definition

What is Hindsight Bias?

Seeing an event as predictable after it has occurred.

Example in practice

After a crash, investors claim the warning signs were obvious.

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The tendency to feel losses more strongly than equivalent gains.

The tendency to overestimate one's knowledge, forecasting ability, or control.

The tendency to seek or interpret information that supports an existing belief.

Incorporating environmental, social, and governance factors into investment analysis or ownership.

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