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“Soon after I bought the stock recommended by my broker, its value dropped by half so I decided to cut loss “, sounds familiar right. While investing in financial markets over the long-term is an excellent path to wealth, it’s not unusual to experience occasional losses as investment values goes up and down, depending on market cycles.
Every investors ever incur loss in our investment during the journey, the point is, do you keep track of your “realized gain/loss” on all your stocks’ transaction? Yes, I know , nobody like to mention or talk about their losses made in stocks as the “Prospect Theory “ suggested in one of the famous behaviors bias i.e “Loss Aversion”
From Wikipedia :
In cognitive psychology and decision theory, loss aversion refers to people's tendency to prefer avoiding losses to acquiring equivalent gains: it is better to not lose $5 than to find $5. Some studies have suggested...
