Ever held onto a losing stock, just because selling would make it feel real?
You’re not bad at math. Your brain is running a shortcut, and it trips up almost every investor at some point. Here are four to watch for.
Loss aversion: Losing $100 hurts more than gaining $100 feels good, even though the math is identical. It’s why people hold onto losing positions way longer than makes sense, hoping they’ll “come back.”
Herd mentality: If everyone’s suddenly talking about the same stock, the pull to jump in isn’t really about the opportunity. It’s about not wanting to be left out. By the time it feels obvious, the price has usually already moved.
Anchoring: The price you paid becomes a mental line you don’t want to cross, even once it’s no longer relevant. The better question isn’t “what did I pay?” It’s “would I buy this today, at this price?”
Sunk cost fallacy: What you’ve already spent is gone either way. It shouldn’t be the reason you keep going.
One question that covers all four: Would I make this same decision today, with fresh eyes, no position, no purchase price, no crowd to follow? If the answer’s no, that’s worth noticing.
None of this makes anyone immune, not even people who study it for a living. It just gives you a moment to pause before reacting instead of after.
If you want a more structured way to build habits like this into how you invest, that’s exactly what we work through inside Go.Up Academy.
Very interesting 👌!!