O'Reilly logo

Principles of Quantitative Equity Investing: A Complete Guide to Creating, Evaluating, and Implementing Trading Strategies by Sugata Ray

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

13. Behavioral Biases Avoided by Investing Quantitatively

One of the main reasons retail investors do not perform as well when directly trading stocks compared with index mutual funds is that their trading decisions suffer from behavioral biases. Behavioral biases are consistent biases that affect human decisions, impeding our ability to make wealth-maximizing decisions. This chapter enumerates some of these biases and discusses how they affect traditional, but not quantitative investing, and how quantitative investing avoids the negative effects of these biases.

The first three biases this chapter examines have to do with the way many people pick stocks. People read about something in the news, and that in turn leads to some research, which ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required