We all like to believe we make smart, logical decisions when it comes to our money. But the truth is, our brains sometimes trick us into making choices that aren’t always the best. These mental shortcuts, called cognitive biases , can cause us to make mistakes, especially when we’re investing. In this post, we’ll break down four common cognitive biases that can affect your investment decisions: confirmation bias , herd mentality , recency bias , and loss aversion . Understanding these can help you make smarter decisions with your money. Imagine you’re really excited about electric cars. You believe they’re the future, so you start looking for news that says electric cars will dominate the market in the next few years. You find articles and expert opinions that support this idea, and you feel great about your decision to invest in electric car companies. But when you come across news that points to challenges for the electric car industry—like battery shortages or new competition—you ig...