Behavioral Insights into Investing: Why Smart Investors Still Make Bad Decisions

Why do smart people still make investing mistakes? In the first episode of the series Behavioral Insights into Investing, My Two Cents explores how behavioral biases like overconfidence, herding, loss aversion, and the disposition effect can shape the way individual investors trade, react to risk, and make decisions. This episode also looks at why financial literacy matters, especially for teens who are increasingly interested in investing. Educational and awareness purposes only. Not investing advice.Research used in this episode:Schwab 2026 Teen Investing Survey: 95% of teens are interested in learning more about investing, and 70% are very or extremely interested in investing. (aboutschwab.com)Systematic review on behavioral biases affecting individual investors: EmeraldBehavioral biases and individual stock investor behavior/performance: ScienceDirectFinancial literacy and behavioral biases in investment decisions: Frontiers in Psychology / PMCFinancial literacy moderating behavioral biases and investment decisions: Emerald