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Animal Spirits Podcast cover image

Boomers vs. Millennials (EP.373)

Animal Spirits Podcast

NOTE

Loss Aversion

Investors often experience loss aversion, where the emotional impact of losing money outweighs the pleasure derived from gaining money. This phenomenon can lead to a disproportionate focus on losses over gains, affecting decision-making and overall perception of investment performance. Despite having two stocks with substantial gains, the psychological weight of a significant loss can dominate an investor's mindset, illustrating the powerful influence of loss aversion in financial contexts.

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