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Dizzy with success

Economists at Maastricht University asked hundreds of clients of a big broking firm how much they agreed with the statement “the recent performance of my portfolio accurately reflects my investment skills.” Investors who had enjoyed above-median returns in the previous month were more likely to agree than those with sub-median returns. And the better the returns, the stronger was investors’ agreement.

This suggests that investors are prone to a self-attribution bias; we attribute success to our own skill and failure to bad luck.

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