When it comes to investing, rely on long-term wisdom

When it comes to the market’s peaks and troughs, investors often don’t react as rationally as they might think. In fact, in times of extreme volatility or poor performance, emotions threaten to commandeer our common sense and warp our memory.

It’s called recency bias.

Recency bias is basically the tendency to think that trends and patterns we observe in the recent past will continue in the future.