Weekend Reading: The Availability Bias: How to Overcome a Common Cognitive Distortion

This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
Weekend reading availability bias Weekend reading availability bias
Weekend Reading

Ever made a snap judgment about an investment based on a recent news story or a friend's hot tip? You've fallen victim to the "availability heuristic," a common mental shortcut where we overestimate the importance of easily recalled information.


This can be dangerous in investing, leading to decisions based on fear, hype, or personal experience rather than solid data. The result? Overestimating unlikely risks and missing out on valuable opportunities.

But it's not all doom and gloom! Once you understand how this cognitive bias works, you can take steps to overcome it. This includes looking at long-term trends, considering base rates, and taking a step back for thoughtful analysis before making any big choices.