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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.