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+2.02%
+4.70%
+10.55%
Dow Jones
32432.08
+194.55 (+0.60%)
S&P 500
3977.53
+6.54 (+0.16%)
Nasdaq
11768.84
-55.12 (-0.47%)
Russell 2000
1753.67
+18.75 (+1.08%)
VIX
20.61
-1.13 (-5.20%)
Dow Jones
32432.08
+194.55 (+0.60%)
S&P 500
3977.53
+6.54 (+0.16%)
Nasdaq
11768.84
-55.12 (-0.47%)
Russell 2000
1753.67
+18.75 (+1.08%)
VIX
20.61
-1.13 (-5.20%)
Many investors sell their assets after they have increased in value and created profits, but they are particularly hesitant to sell them at a loss, even if losses must occasionally be eliminated.
The bias effect has various interpretations, the majority of which rely on four behavioral factors. The first reason is loss aversion.
People experience loss more than they experience success. As a result, they are ready to postpone asset realization as long as they believe the loss will be closed someday. They, on the other hand, have no trouble selling at a profit because the gap between enjoyment and return is not significant.
Many investors sell their assets after they have increased in value and created profits, but they are particularly hesitant to sell them at a loss, even if losses must occasionally be eliminated.
Most people do not look at the entire investment portfolio, but at the various investments separately. When a stock loses, they only look at that loss, and wait for something in the market to change and the loss to close.
Another argument is a dread of regret; realizing losses forces the investor to own his or her error. Taking losses also necessitates considering the possibility that someone else may purchase the stock at a floor price and profit handsomely while you lick your wounds.
And finally there is the lack of self-control - selling a losing property needs resolve, which not everyone possesses.
Nama Cohen
Senior Advisor Corporate Finance and Global-macro research with over 20 years of experience as a buy-side trader
Disclaimer: The article does not constitute investment advice or marketing that takes into account the data and the special needs of each person.
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by TrendSpott including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
Find out what happening right now and get all the pieces of the puzzle on important data activity before the major news sources break the story and see what are the trends
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by TrendSpott including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
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