Part 4: The Journey of a DIY Investor | Fear Takes Over – Loss Aversion

When the inevitable market downturn hit, Mark panicked. Seeing the value of his portfolio drop, he felt the sharp sting of loss aversion—the psychological tendency to feel losses more intensely than gains. Fearing further declines, he sold off a large portion of his investments at a loss, hoping to protect himself from more damage.

Sarah’s behavioral coaching would have helped Mark resist the urge to make impulsive decisions. She would have encouraged him to stay the course, reminding him that markets recover over time and that selling in a panic could lock in unnecessary losses.

Previous
Previous

Tax Review and Planning: A Key Strategy for Professionals and Small Business Owners, Not Just the Wealthy

Next
Next

Financial Success: It’s Not About Magic Formulas…