Two tales of behavioral biases You are a portfolio manager of a prestigious Investment Management company, and two of your clients have reached you to share their thoughts about their portfolio performances: Mathew: Hello, I have lost a lot of money in the last two quarters! I know that I asked you to invest my money into a very aggressive mutual fund even though you said that it did not fit my investor profile. I know, I know, but I now need to recover. I want you to move my money from this aggressive mutual fund to a technology fund that has done excellent in the last year. Thus, the potential return from this fund is higher, and I think that I can recover from my losses. Carol: I wanted to thank you for the extraordinary performance of my portfolio in the last few quarters. I think that this situation will not continue in the future, however. Six consecutive quarters of gain? Come on, a loss is overdue, you know? Should I move my money elsewhere? Or, if we keep the money in this portfolio, dont you think that it is a good idea to invest all the profits from this portfolio into a riskier portfolio so that I can make more money? What behavioral biases do Carol and Mathew exhibit? Explain in details those biases and what you would recommend to them to overcome those biases. Please answer this question with new answers, correctly and a detailed explanation.