Investor Bias Test — Overconfidence, Loss Aversion, Herding
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- 12 questions
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- Instant result
A 12-question check that scores four behavioral biases common in stock, crypto and fund investing: overconfidence, loss aversion, herding and the disposition effect. About 3 minutes, free. For self-understanding, not investment advice.
What's included
- Questions
- 12 items
- Price
- Free
- Areas measured
- Overconfidence Bias · Loss Aversion Bias · Herding Bias · Disposition Effect Bias
Four investing biases, sorted by 12 questions
The Investor Bias Check (SIBC) looks separately at four mental habits that can sway investment decisions. Overconfidence is believing that the assets you pick will beat the market while paying less attention to contrary information. Loss aversion is when the pain of losing an amount weighs more, and lingers longer, than the joy of gaining the same amount. Herding is buying what everyone in your online community is buying, or selling alongside the crowd in a crash. The disposition effect is locking in gains quickly while holding on to losing positions for a long time, waiting to 'just break even'.
Thinking back over your investing in the past year (stocks at home or abroad, crypto, funds, property and so on), you rate 12 statements on five steps, from 'not at all' (0 points) to 'very much' (4 points). The four biases appear mixed together, 3 items each, and every area is scored separately from 0 to 12; no total is calculated. Soundary wrote the items from scratch based on behavioral finance concepts. They are not a translation of any standardized test, and the check is a reference tool that has not yet been psychometrically validated.
Reading your 0–12 score in each area
All four areas use the same bands: 0–3 is low, 4–6 moderate, 7–9 high and 10–12 very high. What matters most is not the absolute number but which of the four areas stands out relative to the others. The result screen pairs each band with a habit suggestion. For example, high overconfidence comes with the advice to write down the reasons behind each decision and later compare them with what actually happened, and the disposition effect with setting your selling conditions at the moment you buy.
The scores describe tendencies; they do not judge your skill or your returns. Because you report on yourself, your answers can shift with the recent market mood: right after a big win the overconfidence items feel more familiar, and right after a sharp drop the loss aversion items do. If you answered by imagining rather than from real trades, keep in mind that you may act differently when real money is at stake. The band cut-offs are Soundary's own reference thresholds, not population norms.
Where the ideas come from, and when to retake
The ideas behind this check have long been studied in behavioral finance. In their 1979 prospect theory, Kahneman and Tversky described how people judge outcomes as gains and losses relative to a reference point, with losses weighing more heavily. In 1985, Shefrin and Statman gave the name disposition effect to the tendency to sell winners too early and ride losers too long. These biases appear not so much because people lack knowledge, but because that is how the human mind tends to work.
Biases change slowly, so retake the check every 6 to 12 months, or after living through a sharp rally or crash, and compare it with your previous result. A practical way to use it is to pick your single highest area and set one rule you can keep, such as writing a one-line reason before every purchase or waiting a day before acting. This result is a reference for self-understanding only. It is not investment advice or a financial recommendation, and investment decisions and their outcomes remain your own.
How scores are interpreted
Overconfidence Bias
The tendency to overestimate one's own information and predictive abilities compared to reality. The sum of 3 items ranges from 0 to 12 points; a higher score indicates a stronger overconfidence bias.
0–3pts · Low
You tend to evaluate your judgment relatively objectively. Keep up your current attitude of verifying evidence and considering opposing views.
4–6pts · Moderate
You may occasionally show a tendency to be more certain of your predictions than reality warrants. It helps to make a habit of asking yourself, 'What signals would I see if I were wrong?' before buying or selling.
7–9pts · High
You are likely to overestimate your information and predictive abilities. Since overconfidence easily leads to frequent trading and concentration in a few stocks, it is advisable to record the rationale for your judgments and compare them with actual results later.
10–12pts · Very High
Your overconfidence bias is very strong. Check whether you are attributing successes to skill and failures to bad luck. Investment decisions and outcomes are your own responsibility, and this result is a reference for self-assessment.
Loss Aversion Bias
The tendency to feel losses much more intensely than gains of the same size, skewing judgments toward avoiding losses. The sum of 3 items ranges from 0 to 12 points; a higher score indicates a stronger loss aversion bias.
0–3pts · Low
You tend to show a relatively balanced emotional response even in the face of losses. However, being indifferent to losses does not necessarily mean good risk management, so it is still important to set an acceptable range in advance.
4–6pts · Moderate
You have some degree of the universal human tendency to feel losses more heavily than gains. Setting a loss limit in advance will help reduce emotionally driven decisions.
7–9pts · High
The pain of loss is at a level where it can heavily influence your decision-making. Strong loss aversion can cause you to delay necessary stop-losses or avoid opportunities altogether, so try setting rules based on percentages rather than amounts in advance.
10–12pts · Very High
The fear of loss is likely to dominate your overall investment behavior. If avoiding account checks or decision paralysis repeats, check whether the investment amount itself has exceeded your psychologically manageable range. Investment decisions and outcomes are your own responsibility, and this result is for reference.
Herding Bias
The tendency to buy and sell following the movements of the majority or the surrounding atmosphere rather than your own analysis. The sum of 3 items ranges from 0 to 12 points; a higher score indicates a stronger herding bias.
0–3pts · Low
You tend to judge based on your own standards rather than the surrounding atmosphere. Independent judgment is a strength, but try to maintain a balance by not completely shutting out the perspectives of others.
4–6pts · Moderate
Communities or what people around you say have some influence on your judgment. It helps to distinguish between gathering information and 'following the herd,' and to make a habit of writing down the reason for buying in one sentence before making a purchase.
7–9pts · High
You show a clear tendency to conform to the movements of the majority. Since chasing buys out of fear of missing out and panic selling with the crowd can repeat, you need to practice making decisions based on evidence you can explain yourself, not on others' certainty.
10–12pts · Very High
Your herding bias is very strong. Remember that when 'everyone is buying,' expectations are often already priced in, and try implementing your own rules, such as a one-day cooling-off period before making a decision. Investment decisions and outcomes are your own responsibility, and this result is for reference.
Disposition Effect Bias
The tendency to quickly sell assets that have gained in value and hold onto losing assets for a long time. The sum of 3 items ranges from 0 to 12 points; a higher score indicates a stronger disposition effect bias.
0–3pts · Low
You appear to sell based on your original plan rather than whether you are at a profit or loss. Keep up your current approach of making a plan first and sticking to it.
4–6pts · Moderate
You may occasionally show a tendency to rush to lock in profits and delay taking losses. Setting selling conditions (targets and limits) at the time of purchase can reduce emotional involvement.
7–9pts · High
The pattern of 'taking profits quickly but failing to cut losses' is relatively clear. If the break-even mentality and averaging down repeat, losses can grow, so try changing your selling criteria from 'my purchase price' to 'would I buy this asset right now if I were buying it fresh?'
10–12pts · Very High
Your disposition effect bias is very strong. Check if you are holding onto assets with unrealized losses for a long time, and it is recommended to write down your selling rules in advance. Investment decisions and outcomes are your own responsibility, and this result is a reference for self-assessment.
Sample questions
- 1. I feel that the stocks or assets I pick myself are highly likely to outperform the market average.
- 2. Even for the same amount, the pain of a loss is much greater and lasts longer than the joy of a gain.
- 3. If it is a stock that everyone is buying in communities, group chats, or on YouTube, I want to buy it too for fear of missing out.
- 4. Even with a small profit, I tend to sell quickly with the mindset of 'taking it before it drops.'
Thinking about your investment experiences over the past year (domestic and international stocks, crypto, funds, real estate, etc.), please choose how closely each statement describes your usual self. If you have little investment experience, you may answer by imagining 'what it would be like if I invested.' There are no right or wrong answers, and the more honestly you answer, the more accurate the results will be.
FAQ
Can I take it with little or no investing experience?
Yes. As the instructions say, if you have little experience you can answer by imagining how you would act if you did invest. Imagined judgments and behavior when real money is at stake can differ, though, so treat the result as a preview of the points to watch. If you retake it after you start investing, you can compare the two results.
Why is there no total score?
Because the four biases sway judgment in different situations and in different ways. Someone with 6 in every area and someone with 12 in overconfidence and herding but 0 in the other two have the same total, yet what each needs to watch is completely different. Looking at the area scores side by side and starting with the highest one is far more useful.
Do high scores mean I'm not suited to investing?
No. These biases are common tendencies that most people have to some degree, and a high score simply signals the situations in which you are likely to waver. Knowing where you waver lets you offset it with rules set in advance. Likewise, low scores in every area don't prove you have no biases; it helps to review them alongside your actual trading record.
How is this different from the Loss Aversion Scale (S-LAS)?
This check is a map: it surveys four biases with 3 items each to show which is relatively strong. The Soundary Loss Aversion Scale looks at loss aversion alone in more depth, with 10 items scored 0–30. If your loss aversion area here lands at 7 or more, in the high band, use that scale to look at specific habits such as putting off a stop-loss or leaning too heavily on safe assets.
Source
The items in this test are a self-check adaptation based on the original instrument and literature below: Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291. / Shefrin, H., & Statman, M. (1985). The disposition to sell winners too early and ride losers too long: Theory and evidence. Journal of Finance, 40(3), 777–790. — A Soundary self-check whose items were all written from scratch with reference to the constructs of behavioral finance (overconfidence, loss aversion, herding, disposition effect). It is not a translation or adaptation of any standardized test; the score bands are Soundary's own reference thresholds, and the result is not investment advice.
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This is a self-screening tool, not a medical diagnosis. If the result concerns you, please consult a mental health professional.