Anchoring


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Anchoring

The act of basing an investment decision on irrelevant information. For example, if one bases the value of a stock on its price a year ago, one is practicing anchoring. This can be a dangerous practice, but it is also easy to do. Anchoring is a concept in behavioral economics, which states that people often make decisions based on their perceptions and feelings in addition to (and sometimes instead of) facts.
References in periodicals archive ?
When anchoring in shallow water we prefer the Danforth as it digs into the sand a little better.
If you're anchoring in strong winds, you may actually have to put the engine in forward gear to control the speed and direction of backward drift.
For anchoring in 25 feet of water or less, a 3- to 6-foot chain is ideal.