Recency Bias in Investing: Why Chasing Recent Winners Often Backfires

The performance-chasing cycle in five steps, from strong returns and headlines to peak excitement, when many investors buy, and fading momentum

There’s a moment many investors recognize. A sector is surging. A fund is outperforming. An investment seems to be winning everywhere you look. The urge to invest feels obvious. It feels less like speculation and more like catching up. That’s often recency bias in investing, and it can become one of the most expensive behavioral … Read more