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Sunk Cost Fallacy and Loss Aversion

This is primarily because investors fail to understand that going against the trend can also mean that you are overlooking the risks that are causing others to sell. Also, averaging down is susceptible to behavioural biases such as the Sunk Cost Fallacy and Loss Aversion. The former is the phenomena in which a person is hesitant to leave a strategy because they have invested substantially in it, even though abandoning would be more profitable, whereas the latter is the phenomenon in which investors are apprehensive of accepting losses. collection from Maheer Modi