Mitigating Anchoring Effect in Equity Investing

In a recent analysis of equity market behavior, a fund manager reviewed her portfolio strategy based on the insights of behavioral finance. She noted that investors often succumb to biases that influence their stock selection and holding periods. One of the primary biases identified was the 'anchoring effect', where individuals rely too heavily on the first piece of information they encounter. This can affect their perceptions about stock prices and company valuations.

Considering this insight, the fund manager must decide how to approach her active equity investing strategy to mitigate the influence of such behavioral biases on her investment decisions.