behaviour
Don't marry a stock
The rule
We fall in love with what we own and defend it long after we would ever buy it fresh. Ask: would I buy this today at this price?
Where it flips
Trading in and out all the time is the opposite fault; not every holding needs a fresh defence each day. Where it misleads: you fidget too much. The fix: ask now and then, honestly, "would I buy it fresh today?" and sell only for a reason about the business, not a feeling about the past.
Owning a thing makes us value it more, and makes us want to leave things as they are. So we cling to a holding out of loyalty, pride, or the price we once paid, instead of judging it coldly. The cure is one honest question: knowing what I know now, would I buy this today at this price?
A worked example
An investor holds a rotting company for years "because I've owned it since ₹500." He refuses to sell even as the business falls apart. Loyalty made that choice, not clear thinking. [illustrative]
How to spot it
- ·holding just because of the price you once paid
- ·loyalty or pride in a position
- ·never asking "would I buy this today?"
Behavioural finance research · Behavioural finance research