The danger of an overconfidence bias is that it makes one prone to making mistakes in investing. Overconfidence tends to make us less than appropriately cautious in our investment decisions. Many of these mistakes stem from an illusion of knowledge and/or an illusion of control.

A cognitive bias is a systematic error in thinking that occurs when people are processing and interpreting information in the world around them and affects the decisions and judgments that they make.

It can distort our understanding of the past. It may lead to our being wise after the event and failing to appreciate how open and uncertain the past was to the people living through it.

The 10 Most Common Mistakes in Decision-Making

• Holding out for the perfect decision.
• Failing to face reality.
• Falling for self-deceptions.
• Going with the flow.
• Rushing and risking too much.
• Relying too heavily on intuition.
• Being married to our own ideas.
• Paying little heed to consequences.

Identify the types of situations where you are most likely to make impulsive decisions and commit to being more cautious and self-aware when you find yourself in one. Always ask for time to process what is being asked of you, but be mindful to avoid procrastinating.

Aboulomania (from Greek a– ‘without’, and boulē ‘will’) is a mental disorder in which the patient displays pathological indecisiveness. It is typically associated with anxiety, stress, depression, and mental anguish, and can severely affect one’s ability to function socially.

It’s no wonder good people make bad decisions….Here they are in order from most to least significant.

• Laziness.
• Not anticipating unexpected events.
• Indecisiveness.
• Remaining locked in the past.
• Having no strategic alignment.
• Over-dependence.
• Isolation.
• Lack of technical depth.