What is Recency Bias ?
Behavioural Biases – Recency Bias - Impact of recent events (Positive or Negative) on decision making.
Investors tend to extrapolate the event into the future
Bear market leads people to prefer safe assets.
Bull market makes people allocate more than what is advised for risky assets.
Recency bias, or availability bias, is a cognitive error identified in behavioral economics whereby people incorrectly believe that recent events will occur again soon. This tendency is irrational, as it obscures the true or objective probabilities of events occurring, leading people to make poor decisions
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