Do you know the pessimism bias?

Pessimism bias is a cognitive bias that causes people to overestimate the likelihood of negative things happening. And how can this bias affect your investment decisions? The pessimistic investor, when he sees his shares falling, tends to get scared and sell them – even if it is a thesis that has required a lot of research. This can lead to significant financial loss in the long run. To invest well in stocks, you need to know how to assess how much a company is worth and be able to act purely rationally, without being influenced by the mood of the market. The stock market is cyclical and declines are inevitable but temporary.