Citi Exposes Biases Costing Investors

0:00City Wealth just dropped a report, exposing cognitive biases that tank investor returns year after year. In 2024, the average equity fund investor pulled in just 16.54% while the S&P 500 crushed it at, 25.02%, that's an 8.48% point gap. The second-wide is in a decade, according to Daubar's latest study. These mental traps sneak up on us, like loss aversion where a $5,000 loss stings twice as bad as the gain feels good, so we cling to. Losers. Then there's the endowment effect, overvaluing stocks just because we own them, herd mentality chasing crowds to buy high, and sell low, anchoring to old. Prices, confirmation bias, ignoring red flags, and underestimating risks. Investors react by pulling out during every quarter of 2024's dips, missing the big rally that followed. Bankstar's research shows this behavior gap costs about 1.2 percentage points a year on average, eating 15% of potential.

1:03Returns over a decade, and messing with retirement plans big time. City lays out fixes starting with owning these biases to pause before impulse trades. Write an investment policy statement with clear targets and rebalance rules, automate contributions and funds to cut emotional calls, and team up with. A fiduciary advisor for objective checks. As volatility hits into 2026, skip the predictions and build bias-proof habits. Your portfolio will thank you with returns closer to the. Markets real power. You've been listening to Durham News today. AI-powered local news.