Overconfidence Game

Investors tend to overestimate the accuracy of their information and their skill in using it.

You’re really not as good an investor as you think you are. Please don’t turn the page -- it’s nothing personal. We all tend to overestimate our abilities. But here’s the good news: A simple reality check can improve your performance.

Overconfidence is part of the human condition. One study found that 93% of us think we’re above-average drivers. Another discovered that 25% of high school seniors rated themselves among the top 1% in their ability to get along well with others. Moreover, we tend to attribute our successes to skill and our failures to bad luck. (Want to test your confidence? Take our quiz.)

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Bob Frick
Senior Editor, Kiplinger's Personal Finance