Many investors holding large losing positions in stocks tend to wait till these stock holdings return to their original prices before selling them rather than realizing their losses. In fact, many investors don’t want to admit that they have made a bad investment. They might feel that if they cash out and realize their investment losses, they are admitting failure. You must be aware of this fallacy and avoid this as far as possible. How to identify a sunk cost fallacy Say for example you’ve bought some of our local stocks over the past few years that have performed really badly because their business models have been fundamentally disrupted. If you’re an investor who bought them at their high, and is still holding them on dearly or constantly pumping more money to average them down, you might be a victim of the sunk cost fallacy. Waiting to breakeven is not always the right move...