Behavioural Finance
Loss Aversion
Definition
What is Loss Aversion?
The tendency to feel losses more strongly than equivalent gains.
Example in practice
How This Looks in Practice
An investor refuses to sell a failed share because realising the loss feels too painful.
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Related Terms
Behavioural Finance
Overconfidence Bias
The tendency to overestimate one's knowledge, forecasting ability, or control.
Behavioural FinanceConfirmation Bias
The tendency to seek or interpret information that supports an existing belief.
Behavioural FinanceAnchoring Bias
The tendency to rely too heavily on an initial number or reference point.
Sustainable InvestingESG Investing
Incorporating environmental, social, and governance factors into investment analysis or ownership.