In a Nobel-winning study, researchers showed people fear losses far more than they value matching gains — a pattern called loss aversion.[1]
Finding $50 feels nice. Losing $50 ruins your afternoon. Same amount — very different sting. Your portfolio feels the same way.
- Loss aversion — selling in a panic to stop the pain.
- Recency bias — assuming the recent trend will continue.
- Overconfidence — trading too much and paying for it.
- Herding — buying what everyone else is buying, right at the top.
You can’t delete these instincts, but you can outsmart them: write a plan, automate it, and check less often. The best edge is not panicking.
Where these numbers come from
Finisdom’s decision journal exists for this reason — write down why you acted, so future-you can spot the emotional traps.
Open the Decision JournalPart of the Finisdom app — sign in to open it.