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Hasty judgments: the hidden trap in your investment decisions

"As the saying goes, looks can be deceiving"

Popular saying

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What is hasty judgements bias?

It is the tendency to make hasty decisions based on superficial or incomplete information.

Hasty judgements can arise from: 

  • Representativeness heuristic: we often assess the probability of events by relying on mental shortcuts that simplify complex decision-making, rather than on objective reasoning1
  • Salience bias: we tend to overweight information that is vivid or immediately available, instead of assessing all relevant data.

Hasty Judgement bias examples:

Following extensive media coverage of a plane crash, some people overestimate the risk of travelling by plane and may prefer to travel by car, even though it is statistically more dangerous.

During the dot-com bubble of the early 2000s, companies who had little or no internet exposure experienced sharp increases in their share prices after rebranding with ‘.com’ in their names. This shows how investors an rely on superficial cues rather than economic fundamentals (for example, earnings and debt levels)1.

The cost of snap judgements

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  • Biased assessments of investment opportunities: investors favour indicators they believe to be representative of a trend (for example, “trendy” company names) instead of analysing actual economic prospects2.
  • Biased estimates of a share's real value: placing too much importance on salient features, such as recent spectacular performance, can lead to overvaluing shares that have recorded strong gains and undervaluing those that have suffered significant losses3.

Time for action: how can you avoid the trap of hasty judgements?

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  • Slow down: take a break before making a decision, especially when situations are complex or the stakes are high, to move beyond your initial intuition.
  • Question your first impressions: treat your initial judgements as provisional and always verify their relevance.
  • Rely on numbers: while intuition can be useful, it may overlook important data; always take the numbers into account.
  • Dig deeper: look for missing information and alternative explanations, rather than focusing solely on what is obvious.
  • Be structured: use checklists or make decision based on predefined criteria to reduce the influence of biased intuition.

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1. Kahneman, Daniel. “Thinking, fast and slow.” Farrar, Straus and Giroux (2011).
2. M. J. Cooper, O. Dimitrov, and P. R. Rau. “A rose. com by any other name.” The journal of Finance, 56(6):2371–2388, 2001.
3. Cosemans, Mathijs, and Rik Frehen. “Salience theory and stock prices: Empirical evidence.” Journal of Financial Economics
140.2 (2021): 460-483

Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 17 April 2026. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
 

Date of first use: 17 April 2026
Doc ID: 5165951