Markets
These Five Cognitive Biases Hurt Investors the Most
There is no shortage of cognitive biases out there that can trip up our brains.
By the last count, there are 188 types of these fallible mental shortcuts in existence, and they constantly impede our ability to make the best decisions about our careers, our relationships, and for building wealth over time.
Biases That Plague Investors
In today’s infographic from StocksToTrade, we dive deeper into five of these cognitive biases – specifically the ones that really seem to throw investors and traders for a loop.
Next time you are about to make a major investing decision, make sure you double-check this list!
The moves that may seem instinctual for the average investor may actually be pre-loaded with cognitive biases.
These problems can even plague the most prominent investors in the world – just look at JPMorgan’s Jamie Dimon!
Biases to Avoid
Here are descriptions and examples of the five cognitive biases that can impact investors the most:
Anchoring Bias
The first piece of information you see or hear often ends up being an “anchor” for others that follow.
As an example, if you heard that a new stock was trading at $5.00 – that is the piece of information you may reference whenever thinking about that stock in the future. To avoid this mental mistake: analyze historical data, but don’t hold historical conclusions.
Recency Bias
Recency bias is a tendency to overvalue the latest information available.
If you heard that a CEO is resigning from a company you own shares of, your impulse may be to overvalue this recent news and sell the stock. However, you should be careful, and instead focus on long-term trends and experience to come up with a more measured course of action.
Loss Aversion Bias
No one wants to lose money, but small losses happen all the time even for the best investors – especially on paper.
Loss aversion bias is a tendency to feel the effects of these losses more than wins of equal magnitude, and it can often result in a sub-optimal shift in investing strategy. Investors that are focused only on avoiding losses will miss out on big opportunities for gains.
Confirmation Bias
Taking in information only that confirms your beliefs can be disastrous. It’s tempting, because it is satisfying to see your previous conviction in a positive light – however, it also makes it possible to miss important findings that may help to change your conviction.
Bandwagon Bias
No one wants to get left out, but being the last one to pile onto an opportunity can also be cataclysmic. If you’re going to be a bandwagon jumper, make sure you’re doing it for the right reasons.
Markets
Mapped: GDP Growth Forecasts by Country, in 2023
The global economy faces an uncertain future in 2023. This year, GDP growth is projected to be 2.9%โdown from 3.2% in 2022.

Mapped: GDP Growth Forecasts by Country, in 2023
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Since Russiaโs invasion of Ukraine early last year, talk of global recession has dominated the outlook for 2023.
High inflation, spurred by rising energy costs, has tested GDP growth. Tightening monetary policy in the U.S., with interest rates jumping from roughly 0% to over 4% in 2022, has historically preceded a downturn about one to two years later.
For European economies, energy prices are critical. The good news is that prices have fallen recently since March highs, but the continent remains on shaky ground.
The above infographic maps GDP growth forecasts by country for the year ahead, based on projections from the International Monetary Fund (IMF) October 2022 Outlook and January 2023 update.
2023 GDP Growth Outlook
The world economy is projected to see just 2.9% GDP growth in 2023, down from 3.2% projected for 2022.
This is a 0.2% increase since the October 2022 Outlook thanks in part to Chinaโs reopening, higher global demand, and slowing inflation projected across certain countries in the year ahead.
With this in mind, we show GDP growth forecasts for 191 jurisdictions given multiple economic headwindsโand a few emerging bright spots in 2023.
Country / Region | 2023 Real GDP % Change (Projected) |
---|---|
๐ฆ๐ฑ Albania | 2.5% |
๐ฉ๐ฟ Algeria | 2.6% |
๐ฆ๐ด Angola | 3.4% |
๐ฆ๐ฌ Antigua and Barbuda | 5.6% |
๐ฆ๐ท Argentina* | 2.0% |
๐ฆ๐ฒ Armenia | 3.5% |
๐ฆ๐ผ Aruba | 2.0% |
๐ฆ๐บ Australia* | 1.6% |
๐ฆ๐น Austria | 1.0% |
๐ฆ๐ฟ Azerbaijan | 2.5% |
๐ง๐ญ Bahrain | 3.0% |
๐ง๐ฉ Bangladesh | 6.0% |
๐ง๐ง Barbados | 5.0% |
๐ง๐พ Belarus | 0.2% |
๐ง๐ช Belgium | 0.4% |
๐ง๐ฟ Belize | 2.0% |
๐ง๐ฏ Benin | 6.2% |
๐ง๐น Bhutan | 4.3% |
๐ง๐ด Bolivia | 3.2% |
๐ง๐ฆ Bosnia and Herzegovina | 2.0% |
๐ง๐ผ Botswana | 4.0% |
๐ง๐ท Brazil* | 1.2% |
๐ง๐ณ Brunei Darussalam | 3.3% |
๐ง๐ฌ Bulgaria | 3.0% |
๐ง๐ซ Burkina Faso | 4.8% |
๐ง๐ฎ Burundi | 4.1% |
๐จ๐ป Cabo Verde | 4.8% |
๐จ๐ฒ Cameroon | 4.6% |
๐ฐ๐ญ Cambodia | 6.2% |
๐จ๐ฆ Canada* | 1.5% |
๐จ๐ซ Central African Republic | 3.0% |
๐น๐ฉ Chad | 3.4% |
๐จ๐ฑ Chile | -1.0% |
๐จ๐ณ China* | 5.3% |
๐จ๐ด Colombia | 2.2% |
๐ฐ๐ฒ Comoros | 3.4% |
๐จ๐ท Costa Rica | 2.9% |
๐จ๐ฎ Cรดte d'Ivoire | 6.5% |
๐ญ๐ท Croatia | 3.5% |
๐จ๐พ Cyprus | 2.5% |
๐จ๐ฟ Czech Republic | 1.5% |
๐จ๐ฉ Democratic Republic of the Congo | 6.7% |
๐ฉ๐ฐ Denmark | 0.6% |
๐ฉ๐ฏ Djibouti | 5.0% |
๐ฉ๐ฒ Dominica | 4.9% |
๐ฉ๐ด Dominican Republic | 4.5% |
๐ช๐จ Ecuador | 2.7% |
๐ช๐ฌ Egypt* | 4.0% |
๐ธ๐ป El Salvador | 1.7% |
๐ฌ๐ถ Equatorial Guinea | -3.1% |
๐ช๐ท Eritrea | 2.9% |
๐ช๐ช Estonia | 1.8% |
๐ธ๐ฟ Eswatini | 1.8% |
๐ช๐น Ethiopia | 5.3% |
๐ซ๐ฏ Fiji | 6.9% |
๐ซ๐ฎ Finland | 0.5% |
๐ซ๐ท France* | 0.7% |
๐ฒ๐ฐ North Macedonia | 3.0% |
๐ฌ๐ฆ Gabon | 3.7% |
Georgia | 4.0% |
Germany* | 0.1% |
Ghana | 2.8% |
Greece | 1.8% |
Grenada | 3.6% |
Guatemala | 3.2% |
Guinea | 5.1% |
Guinea-Bissau | 4.5% |
Guyana | 25.2% |
Haiti | 0.5% |
Honduras | 3.5% |
Hong Kong SAR | 3.9% |
Hungary | 1.8% |
Iceland | 2.9% |
India* | 6.1% |
Indonesia* | 4.8% |
Iraq | 4.0% |
Ireland | 4.0% |
Iran* | 2.0% |
Israel | 3.0% |
Italy* | 0.6% |
Jamaica | 3.0% |
Japan* | 1.8% |
Jordan | 2.7% |
Kazakhstan* | 4.3% |
Kenya | 5.1% |
Kiribati | 2.4% |
South Korea* | 1.7% |
Kosovo | 3.5% |
Kuwait | 2.6% |
Kyrgyz Republic | 3.2% |
Lao P.D.R. | 3.1% |
Latvia | 1.6% |
Lesotho | 1.6% |
Liberia | 4.2% |
Libya | 17.9% |
Lithuania | 1.1% |
Luxembourg | 1.1% |
Macao SAR | 56.7% |
Madagascar | 5.2% |
๐ฒ๐ผ Malawi | 2.5% |
๐ฒ๐พ Malaysia* | 4.4% |
๐ฒ๐ป Maldives | 6.1% |
๐ฒ๐ฑ Mali | 5.3% |
๐ฒ๐น Malta | 3.3% |
๐ฒ๐ญ Marshall Islands | 3.2% |
๐ฒ๐ท Mauritania | 4.8% |
๐ฒ๐บ Mauritius | 5.4% |
๐ฒ๐ฝ Mexico* | 1.7% |
๐ซ๐ฒ Micronesia | 2.9% |
๐ฒ๐ฉ Moldova | 2.3% |
๐ฒ๐ณ Mongolia | 5.0% |
๐ฒ๐ช Montenegro | 2.5% |
๐ฒ๐ฆ Morocco | 3.1% |
๐ฒ๐ฟ Mozambique | 4.9% |
๐ฒ๐ฒ Myanmar | 3.3% |
๐ณ๐ฆ Namibia | 3.2% |
๐ณ๐ท Nauru | 2.0% |
๐ณ๐ต Nepal | 5.0% |
๐ณ๐ฑ Netherlands* | 0.6% |
๐ณ๐ฟ New Zealand | 1.9% |
๐ณ๐ฎ Nicaragua | 3.0% |
๐ณ๐ช Niger | 7.3% |
๐ณ๐ฌ Nigeria* | 3.2% |
๐ณ๐ด Norway | 2.6% |
๐ด๐ฒ Oman | 4.1% |
๐ต๐ฐ Pakistan* | 2.0% |
๐ต๐ผ Palau | 12.3% |
๐ต๐ฆ Panama | 4.0% |
๐ต๐ฌ Papua New Guinea | 5.1% |
๐ต๐พ Paraguay | 4.3% |
๐ต๐ช Peru | 2.6% |
๐ต๐ญ Philippines* | 5.0% |
๐ต๐ฑ Poland* | 0.3% |
๐ต๐น Portugal | 0.7% |
๐ต๐ท Puerto Rico | 0.4% |
๐ถ๐ฆ Qatar | 2.4% |
๐จ๐ฌ Republic of Congo | 4.6% |
๐ท๐ด Romania | 3.1% |
๐ท๐บ Russia* | 0.3% |
๐ท๐ผ Rwanda | 6.7% |
๐ผ๐ธ Samoa | 4.0% |
๐ธ๐ฒ San Marino | 0.8% |
๐ธ๐น Sรฃo Tomรฉ and Prรญncipe | 2.6% |
๐ธ๐ฆ Saudi Arabia* | 2.6% |
๐ธ๐ณ Senegal | 8.1% |
๐ท๐ธ Serbia | 2.7% |
๐ธ๐จ Seychelles | 5.2% |
๐ธ๐ฑ Sierra Leone | 3.3% |
๐ธ๐ฌ Singapore | 2.3% |
๐ธ๐ฐ Slovak Republic | 1.5% |
๐ธ๐ฎ Slovenia | 1.7% |
๐ธ๐ง Solomon Islands | 2.6% |
๐ธ๐ด Somalia | 3.1% |
๐ฟ๐ฆ South Africa* | 1.2% |
๐ธ๐ธ South Sudan | 5.6% |
๐ช๐ธ Spain* | 1.1% |
๐ฑ๐ฐ Sri Lanka | -3.0% |
๐ฐ๐ณ St. Kitts and Nevis | 4.8% |
๐ฑ๐จ St. Lucia | 5.8% |
๐ป๐จ St. Vincent and the Grenadines | 6.0% |
๐ธ๐ฉ Sudan | 2.6% |
๐ธ๐ท Suriname | 2.3% |
๐ธ๐ช Sweden | -0.1% |
๐จ๐ญ Switzerland | 0.8% |
๐น๐ผ Taiwan | 2.8% |
๐น๐ฏ Tajikistan | 4.0% |
๐น๐ฟ Tanzania | 5.2% |
๐น๐ญ Thailand* | 3.7% |
๐ง๐ธ The Bahamas | 4.1% |
๐ฌ๐ฒ The Gambia | 6.0% |
๐น๐ฑ Timor-Leste | 4.2% |
๐น๐ฌ Togo | 6.2% |
๐น๐ด Tonga | 2.9% |
๐น๐น Trinidad and Tobago | 3.5% |
๐น๐ณ Tunisia | 1.6% |
๐น๐ท Turkey* | 3.0% |
๐น๐ฒ Turkmenistan | 2.3% |
๐น๐ป Tuvalu | 3.5% |
๐บ๐ฌ Uganda | 5.9% |
๐บ๐ฆ Ukraine | N/A |
๐ฆ๐ช United Arab Emirates | 4.2% |
๐ฌ๐ง United Kingdom* | -0.6% |
๐บ๐ฒ U.S.* | 1.4% |
๐บ๐พ Uruguay | 3.6% |
๐บ๐ฟ Uzbekistan | 4.7% |
๐ป๐บ Vanuatu | 3.1% |
๐ป๐ช Venezuela | 6.5% |
๐ป๐ณ Vietnam | 6.2% |
West Bank and Gaza | 3.5% |
๐พ๐ช Yemen | 3.3% |
๐ฟ๐ฒ Zambia | 4.0% |
๐ฟ๐ผ Zimbabwe | 2.8% |
*Reflect updated figures from the January 2023 IMF Update.
The U.S. is forecast to see 1.4% GDP growth in 2023, up from 1.0% seen in the last October projection.
Still, signs of economic weakness can be seen in the growing wave of tech layoffs, foreshadowed as a white-collar or โPatagonia-vestโ recession. Last year, 88,000 tech jobs were cut and this trend has continued into 2023. Major financial firms have also followed suit. Still, unemployment remains fairly steadfast, at 3.5% as of December 2022. Going forward, concerns remain around inflation and the path of interest rate hikes, though both show signs of slowing.
Across Europe, the average projected GDP growth rate is 0.7% for 2023, a sharp decline from the 2.1% forecast for last year.
Both Germany and Italy are forecast to see slight growth, at 0.1% and 0.6%, respectively. Growth forecasts were revised upwards since the IMF’s October release. However, an ongoing energy crisis exposes the manufacturing sector to vulnerabilities, with potential spillover effects to consumers and businesses, and overall Euro Area growth.
China remains an open question. In 2023, growth is predicted to rise 5.2%, higher than many large economies. While its real estate sector has shown signs of weakness, the recent opening on January 8th, following 1,016 days of zero-Covid policy, could boost demand and economic activity.
A Long Way to Go
The IMF has stated that 2023 will feel like a recession for much of the global economy. But whether it is headed for a recovery or a sharper decline remains unknown.
Today, two factors propping up the global economy are lower-than-expected energy prices and resilient private sector balance sheets. European natural gas prices have sunk to levels seen before the war in Ukraine. During the height of energy shocks, firms showed a notable ability to withstand astronomical energy prices squeezing their finances. They are also sitting on significant cash reserves.
On the other hand, inflation is far from over. To counter this effect, many central banks will have to use measures to rein in prices. This may in turn have a dampening effect on economic growth and financial markets, with unknown consequences.
As economic data continues to be released over the year, there may be a divergence between consumer sentiment and whether things are actually changing in the economy. Where the economy is heading in 2023 will be anyone’s guess.
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