Investment Psychology Test 7

You bought a new house. Originally, the neighborhood was very green, and housing prices are rising. But it didn't take long because building a tall building on the opposite side would seriously affect the lighting of your building (which is basically impossible to change). Since then, many people have sold their houses, and the sales price has been getting lower and lower. What will you do?

A. Sell it quickly. If it is higher than the purchase price, you can still make a profit.

B. You must ask for an explanation and get compensation that you feel is reasonable like a “nail user.”

C. Wait, maybe the tall buildings won't be built; maybe other good things will happen in the future, and the house will rise in value again.

D. Never sell it; it's not easy to own your own house.

ANSWER:

If you choose A, you will make a quick decision according to changes in the situation, and you have a certain sense of investment.

Choice B has to be said that your courage is commendable; once something happens, your courage can overcome everything!

By choosing C, you are immersed in past success and unwilling to acknowledge failure, falling into a “cognitive dissonance” of investment psychology.

If you choose D and don't have your own house, it's fine. You can also buy a new one with the money you sell. If it continues to depreciate, it's a real loss; you have to consider it clearly.

Cognitive dissonance:

Cognitive dissonance is the psychology of investing in the Hang Seng Index. Psychologists have done quite a bit of research on specific memory order issues. People often see themselves as “smart and kind,” and evidence that contradicts this image gives rise to two apparently opposite opinions. For example, let's say you think you're a good person, but your memories of a past act are reminding you, in fact, you have bad points too. You're going to feel really bad. Psychologists call this feeling cognitive dissonance. According to the Hang Seng Circle, disharmony in investors' perceptions means that the brain is struggling with opposing ideas: stable, but not very stable. To avoid self-distress, investors actually tend to ignore, reject, or minimize any information that conflicts with their positive self-image. Irrefutable evidence can lead to a change in mentality. The way people think can be changed to match past decisions. Hang Seng Circle hopes that all investors make the right decisions. For example, in a survey of horse gamblers estimating their winning rate in horse racing, those who left the betting window after placing a bet were more convinced that their chosen horse had a better chance of winning than those who had not yet placed a bet. Before placing a bet, horse gamblers are hesitant in estimating their chances of winning. However, after placing the bet, their beliefs became consistent with their own decisions due to their misunderstanding of the Hang Seng Index investment mentality.

Cognitive Dissonance Hang Seng Index investment mentality. Avoiding cognitive dissonance affects the decision-making process in two ways. First, people may be unable to make important decisions due to discomfort in the face of this incoordination. For example, when considering saving for future retirement, some young people have an image of being isolated and helpless with a low income. To avoid the psychological conflict between a good image of themselves and the complete opposite image of the future, they will completely avoid saving money to retire. Second, the filtering of new information limits our ability to evaluate and monitor investment decisions. How can investors make money if they ignore negative information?

There isn't any test that works for everyone. The test results are for reference and entertainment only, do not serve as a basis for diagnosis, and have no practical significance.