According to Warren Buffett, "Emotions are contagious, and emotions have no business in investing". But it is not possible for a normal human mind to yield to emotions while making investments. Thus, Behavioral Finance, a field of Psychology as applied to Economics and Finance, can give us interesting insights, and psychological biases that we are all prone to while making investments. A list of six things according to Greg B. Davies, Head of Behavioral and Quantitative Investment Philosophy, that we can focus on while making investments are:
1. Failing to see the big picture
2. Using a short term decision horizon
3. Buying high, selling low
4. Getting emotionally attached to concentrated investments