Behavioural Finance
Home Bias
Definition
What is Home Bias?
An excessive preference for domestic investments over foreign assets.
Example in practice
How This Looks in Practice
A portfolioThe complete collection of investments owned by an investor or managed under one mandate. holds only local shares despite global diversificationSpreading investments across assets, issuers, sectors, or markets to reduce dependence on one exposure. opportunities.
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Related Terms
Behavioural Finance
Loss Aversion
The tendency to feel losses more strongly than equivalent gains.
Behavioural FinanceOverconfidence Bias
The tendency to overestimate one's knowledge, forecasting ability, or control.
Behavioural FinanceConfirmation Bias
The tendency to seek or interpret information that supports an existing belief.
Sustainable InvestingESG Investing
Incorporating environmental, social, and governance factors into investment analysis or ownership.