B is for understanding behavioural biases and our tips on how to prevent their adverse effect on investor portfolios.

What drives investor behaviour?

It depends on a number of factors: what the investor's objectives are, including their risk tolerance and return target, what the investor's beliefs are about where they are in the market cycle and what markets will do next within the investor's time horizon. Depending on investor's beliefs, preferences, emotions and past experiences (all invisible to the market), they can come to contrasting conclusions, resulting in different investor behaviour and sometimes opposing investment strategies (the only things visible to the market).