doi: 10.18178/ijssh.2025.15.2.1242
How to Control Behavioural Biases and Improve Investment Decisions
Sophia Sea
- National Junior College, Singapore
- Manuscript received December 2, 2024
- revised January 4, 2025
- accepted February 11, 2025
- published March 20, 2025
Abstract
Individual investors often make irrational investment decisions, due to behavioural biases present in human nature. This flaw in individual investors has been widely studied in many finance and economics literature, which show that behavioural biases have negative implications on individual investors’ decision-making and ultimately their financial gains. Thus, the objective of this research is to raise awareness on the importance of controlling behavioural biases in order to make more rational investment decisions. This paper analyses the common behavioural biases present in individual investors, such as overconfidence, loss aversion and herding. Moreover, the study evaluates the advice given by experts, such as Warren Buffett and Charlie Munger, to help individual investors identify and adopt more sustainable investment strategies, in order to make more informed investment decisions and avoid common pitfalls. By recognizing their behavioural biases and adopting strategies to mitigate them, individual investors will be able to improve their investment outcomes and achieve their financial goals.
Keywords
- behavioural bias
- individual investors
- investment decision-making
How to Cite
Sophia Sea, "How to Control Behavioural Biases and Improve Investment Decisions," International Journal of Social Science and Humanity, vol. 15, no. 2, pp. 58-66, 2025. https://doi.org/ 10.18178/ijssh.2025.15.2.1242
Copyright & License
Copyright © 2025 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).