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5 behavioural traits that might affect your investment returns

A recent SEBI report has found that trading is a deep loss-making activity for individual traders; however, their numbers have increased sixfold in the last 3 years.

Behaviour drives return when it comes to money decisions; most individuals tend to think the opposite.

Common behavioural biases that lead to losses include optimism bias, fear of missing out and loss aversion.

Optimism bias causes individuals to focus only on historical growth in markets without considering quality and volatility.

Fear of missing out leads individuals to jump in after others without understanding their own risk tolerance and goals.

Loss aversion makes individuals reluctant to book losses, instead hoping that gains will come eventually.

Trading in equity derivatives requires careful study, large doses of discipline and objective positions rather than emotional reactions.

Nithin Kamath has warned against the perils of option buying due to the high risks involved.

Click here to know more about the effect of behavioural traits on investments.


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5 behavioural traits that might affect your investment returns; check here

Behaviour drives return when it comes to spending and investing. SEBI's study shows that most individual traders make losses when trading in equity derivatives due to behavioural biases like optimism bias, fear of missing out, loss aversion and lack of discipline.

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5 behavioural traits that might affect your investment returns; check here

Behaviour drives return when it comes to spending and investing. SEBI's study shows that most individual traders make losses when trading in equity derivatives due to behavioural biases like optimism bias, fear of missing out, loss aversion and lack of discipline.

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