Investors often make decisions that deviate from logic and reason due to various behavioural biases. It is important for investors to be aware of these biases in order to make informed investment choices. Here are 9 common biases that investors should watch out for:

1. Self-attribution bias: Investors with this bias tend to attribute their successes to their own actions while blaming external factors for their failures. This can lead to overconfidence and underperformance in the long run. To overcome this bias, investors should practice accountability and learn from their mistakes.

2. Herd mentality: Many investors tend to follow the crowd instead of relying on their own analysis. This can result in a riskier portfolio that may not align with their risk appetite. It is important to pause and think before investing, understand your own objectives, and work towards them instead of blindly following the herd.

3. Trend-chasing bias: Investors often chase past performance, believing that historical returns can predict future performance. However, research shows that performance does not persist in the future. To avoid this bias, investors should resist the urge to follow the crowd and focus on long-term investment strategies.

4. Loss aversion: People tend to remember losses more vividly than gains. This bias leads investors to take less risk to avoid potential losses. To mitigate this bias, investors should implement strict stop-loss measures and seek professional advice for portfolio rebalancing.

5. Disposition effect: This bias refers to the tendency to sell stocks that have appreciated too early while holding onto losing stocks for too long. To counteract this effect, investors should set stop-loss limits and take profits when appropriate based on thorough market evaluation.

6. Representativeness: Investors often label an investment as good or bad based on its recent performance. This can lead to buying stocks that have already risen and ignoring undervalued stocks. It is important to be convinced of the long-term potential of a stock before making a purchase.

7. Confirmation bias: Investors may already have preconceived notions about certain stocks, leading them to selectively focus on information that confirms their bias. This bias can result in poor investment decisions. It is important to consider all available information and conduct thorough analysis before making investment choices.

8. Familiarity bias: Investors tend to cling to familiar investments, leading to a lack of diversification and increased risk. To overcome this bias, investors should broaden their portfolio allocation decisions to achieve wider diversification and reduce risk.

9. Recency bias: This bias occurs when investors give greater importance to recent events compared to earlier events. It can lead to inappropriate asset allocation and suboptimal investment choices. Investors should consider seeking professional assistance for proper asset allocation.

While it may not be possible to completely avoid biases, investors can mitigate their effects by understanding their own behavioural biases, developing objective investment strategies, and adhering to trading rules. It is also important for investors to have a long-term perspective, determine their risk tolerance, establish an appropriate asset allocation strategy, and regularly rebalance their portfolios. By doing so, investors can increase their chances of achieving successful and profitable investment outcomes.