Unformatted text preview: higher tendancy to keep their money in what they own rather than change it, even if the risk is not suitable for the person. In example, someone who receives a bonus will be more likely to put it in the stock market compared to someone who receives the same amount of money from an inheritance will put it in a bond. Also, if the decision becomes too difficult they will likely keep it where it is, the status quo. People also have a hard time assessing risk to their true value which could be fatal in their retirement. Memory plays a part in investing, good and bad times will be overhyped and will lead one to avoid or invest more in similar situations. Immediate drastic changes will stick more than gradual yet larger changes. Cognitive dissonance is when the brain blocks out a contradicotry though to maintain an individual's self-image. People tend to think they performed better than they actually did as a result....
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- Fall '10
- Investing, higher risks, snakebite effect