I shared this post last spring, and I think it’s a great reminder to help us keep our expectations in check for the new year.

The recency effect is a well-known cognitive bias in which events that have occurred most recently are given more weight than a longer-term trend. Recency bias poses a problem when it comes to evaluating investment returns—most people will only look at the last year’s returns, disregarding historical trends.

Click the photo to see the full article.