Individual investors' tendency to trade too much based on the mistaken belief that they can pick winners and losers better than investment professionals is known as ________.

Question

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The tendency to trade too much based on the mistaken belief of superior stock-picking ability is known as the Investor Overconfidence Hypothesis. It is a behavioral bias that can lead to excessive trading and poor investment decisions. The Disposition Effect is a related bias, but it refers specifically to the tendency to hold on to losing stocks too long while selling winning stocks too soon. The Investor Attention Hypothesis suggests that individual investors tend to focus too much on stocks that receive a lot of media attention, leading to inefficient markets. The Excessive Trading Costs Hypothesis suggests that individual investors tend to trade excessively due to the high costs associated with frequent trading, such as transaction fees and taxes.

Individual Investors' Tendency to Trade Too Much Based on the Mistaken