From Morningstar: 2024-06-07 09:48:00

The latest meme stock frenzy on Reddit has captivated investors, showcasing the new technology and options available for investing, from crypto to online trading apps. Yet, our brains are ill-equipped for this fast-paced investing landscape, leading to hasty decisions based on cognitive biases like herding behavior, the availability heuristic, and action bias.

Investors often find themselves swept up in the excitement of meme stock rallies, influenced by the crowd and recent success stories. These cognitive biases, honed over millennia, can lead to poor investment decisions, prompting a more deliberate approach to investing that includes long-term planning, limited market news consumption, skepticism of online stories, and deliberate decision-making processes.



Read more at Morningstar: Meme Stocks Are Rallying, But I’m Investing Like…