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By Staff Reporters
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The Gambler’s Fallacy occurs when we subconsciously believe we can use past events to predict the future. It is also called the Monte Carlo Fallacy, after the Casino de Monte-Carlo in Monaco where it was observed in 1913
For example, it is common for the hottest sector during one calendar year to attract the most investors the following year.
Of course, just because an investment did well last year doesn’t mean it will continue to do well this year. In fact, it is more likely to lag the market.
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Filed under: "Ask-an-Advisor", Ethics, iMBA, Inc., LifeStyle | Tagged: bias, Casino de Monte-Carlo, gambler's fallacy, iMBA, Institute Medical Business Advisors, medical business advisors, Monaco, Monte Carlo Fallacy |
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