Why do investors react differently to the same market event?
It depends on a number of factors, such as what the investor’s objectives are, including their risk tolerance and return target, what their beliefs are about where they are in the market cycle and what markets will do next within the investor’s time horizon.
Herding, fear of loss aversion, overconfidence, familiarity, among many other biases can lead investors to make poor decisions, miss out on valuable opportunities, or lose focus on the long-term investment plan driven by emotion.
Check the full article from Russell Investments to learn more about these biases.