Behavioral Biases in Private Wealth Management

In the context of private wealth management, understanding clients' behavioral factors is crucial for effective portfolio management. Behavioral finance studies how psychological influences and cognitive biases affect the financial behaviors of individuals and can lead to suboptimal investment decisions.

Discuss two common behavioral biases that may impact a client's investment decisions. For each bias, provide an example of how it could manifest in a real-world scenario and suggest a strategy a financial advisor could use to mitigate its effects.