Behavioral Finance

Anchoring and Framing Effects in Financial Decision-Making

Learn how anchoring bias and framing effects distort investment decisions. Understand anchor formation, insufficient adjustment, and advisor correction…

14 min readLevel: CoreCalculatorExcel model

Availability Heuristic, Recency Bias & Self-Attribution in Investing

How availability bias, recency bias, and self-attribution distort investment probability estimates and lead to systematic portfolio errors.

12 min readLevel: CoreCalculatorExcel model

Behavioral Asset Allocation: Applying Bias Awareness to Portfolio Construction

Learn how to build portfolios that account for investor behavioral biases using Pompian’s best practical allocation framework, the moderate-vs-adapt decision…

10 min readLevel: Core

Belief Perseverance Bias: Cognitive Dissonance, Conservatism, Confirmation & Representativeness

Belief perseverance bias is a family of cognitive biases causing investors to cling to prior beliefs despite contradictory evidence.

14 min readLevel: Core

Illusion of Control, Hindsight Bias & Outcome Bias in Investing

The illusion of control, hindsight bias, and outcome bias form a self-reinforcing loop that distorts investor decision-making.

15 min readLevel: Core

Mental Accounting Bias: How Separate Buckets Distort Investment Decisions

Mental accounting bias is the tendency to treat money differently based on its source, intended use, or account label—violating economic fungibility.

12 min readLevel: CoreCalculatorExcel model

Overconfidence Bias in Investing: Miscalibration, Better-Than-Average & Illusion of Knowledge

Overconfidence bias causes investors to trade excessively, hold concentrated portfolios, and underestimate risk.

13 min readLevel: Core

Status Quo, Endowment, Regret Aversion, Self-Control & Affinity Bias in Investing

Five emotional biases drive portfolio inertia: status quo bias, the endowment effect, regret aversion, self-control bias, and affinity bias.

17 min readLevel: CoreCalculatorExcel model