7 Common Investing Biases

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A noted investor once said, “The investor’s chief problem – and even his worst enemy – is likely to be himself.” Good investing requires investors to be logical with a practical approach when managing their money. But that is often easier said than done. Everyone is different and accordingly thinks and acts differently depending on their circumstances, conditioning and past experiences. It is also fair to say that, more often than not, investors feel a gamut of emotions during their investment journey. This may influence them to make flawed decisions because emotions are likely to override reason and logic. These emotions, or biases as they are known, can play a substantial role in the investments they make. Hence, it becomes important to have an idea of the types of investing biases that can hamper an investor’s decision-making ability so that they can stay clear of them.

In this article, we have enumerated 7 such biases that investors can try to avoid while investing in mutual funds. Read on to find out more.


Helpful information for investors: All Mutual Fund investors have to go through a one-time KYC (know your Customer) process. Investors should deal only with registered mutual funds, to be verified on SEBI website under ‘Intermediaries/ Market Infrastructure Institutions’. For redressal of your complaints, you may please visit www.scores.gov.in . For more info on KYC, change in various details & redressal of complaints, visit mf.nipponindiaim.com/investoreducation/what-to-know-when-investing This is an investor education and awareness initiative by Nippon India Mutual Fund.

The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The document has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. The sponsor, the Investment Manager, the Trustee or any of their directors, employees, associates or representatives (“entities & their associates”) do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Entities & their associates including persons involved in the preparation or issuance of this material shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material. Recipient alone shall be fully responsible for any decision taken on the basis of this document.