Behavioural Finance

Recency Bias

Definition

What is Recency Bias?

The tendency to give excessive weight to recent events.

Example in practice

After a strong year, an investor assumes the same return will continue.

Keep learning

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.

Think you know your investing terms?

Put your knowledge to the test with a quick quiz.