Overestimation of one's ability to control investments

Over-confidence: Overestimation of one's ability to control investments or predict the movements of the market may lead to some quite adventurous decisions or inadequately diversified portfolios. Loss Aversion: There is more fear of losing than desire for gains. This means that very conservative investment strategies will be followed, which may not grow up to a high level that will be needed by the time retirement comes around, which is relatively easier.