Individual investors tend to do worse than the overall stock market.Why? A major reason is that they have behavioral or psychologicalbiases that affect their ability to act objectively when investing. Yet,people frequently think they are better investors than they actuallyare. This contradiction reflects a discrepancy between perceptionand reality. Investors like to believe they can remain unbiased, butthey can’t because they have built-in “handicaps” that alter theirthinking and negatively affect their decision-making