According to Investopedia, anchoring is a behavioral finance term to describe an irrational bias towards an arbitrary benchmark figure. This means that an investor is often subconsciously is affected by a fixed reference point (anchor) such as the purchase price of a stock, when making subsequent decisions about the stock. In other words, if you bought a stock at $50, you tend to be unconsciously affected by your original buy-in price, and this affects your future decisions to buy/sell. This becomes an issue when you buy a good stock at a low price. For instance, if you bought a good stock at $50, and it keeps going up, you find yourself unable to decide when to average in, because you keep thinking back to your original buy-in price. You then miss out on the 5x, 10x gains to follow. This also applies when selling a stock, you use your buy-in price as an anchor, and may sell too fast, instead of holding on....