The Effect of Framing on Financial Decision-Making
Why it's important for investors to have conviction--especially when going against the crowd.
This is the sixth article in the Behavioral Finance and Macroeconomics series. We will explore the effect that behavior has on markets and the economy as a whole, and how advisors who understand this relationship can work more effectively with their clients. (Access past articles here.)
Previously, we discussed the details of a bias called groupthink. Next we'll discuss framing bias. Framing occurs at both the individual investor decision-making level and at the macroeconomic level. This article focuses on the latter.