Psychological biases

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In, 1999, the S&P returned 21 percent, closing out a streak of five consecutive stellar up-years. Then in 2000, the S&P 500 returned -9.1 percent. In 2001, the S&P500 returned -16.1 percent. At the end of 2001, Wall Street strategists who were interviewed by Barron's forecast that the S&P would increase by 21 percent in 2002. In 2002,the S&P actually returned -23 percent. The average strategist's forecast for 2003 was for an increase of 15.3percent. Do these forecast reflect any psychological biases?

Reference no: EM1359019

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