The Rational Reminder Podcast · Thursday, August 6, 2026
Barry Ritholtz explains common behavioral biases impacting investors, including recency bias (overweighting recent events), anchoring (relying on initial information like purchase price), and confirmation bias (seeking confirming evidence). He stresses that unchecked biases lead to poor investment decisions.
“Recency bias is a very common one. It's the tendency to overweight recent events and experiences when making decisions. So, if the market has been going up for a few years, investors might assume that trend will continue indefinitely. Conversely, after a sharp downturn, they might become overly pessimistic and assume the worst will happen.”
“Anchoring is another bias where people tend to rely too heavily on the first piece of information they receive, like the purchase price of a stock, and then anchor their subsequent decisions to that initial anchor. Confirmation bias is the tendency to seek out information that confirms your existing beliefs, while ignoring contradictory evidence.”