Disposition Effect
The tendency to sell winning investments too soon while holding onto losing ones for too long.
This bias occurs when investors let emotions drive decisions. They sell winners quickly to lock in gains and avoid regret, but hold losers hoping to break even. For example, selling a stock that doubled in value, while keeping a stock that lost half its value.
Recognising a definition is not the same skill as spotting it.
Two scenarios from the app, with distractors drawn from the same family of biases — which is what makes them hard.
Maria sells her stock in a tech company right after it rises 15%, locking in the profit. She still holds onto a different stock that has dropped 25% from her purchase price, hoping it will eventually recover.
Marcus buys a book and reads the first chapter, which he enjoys immensely. He decides to stop reading there to preserve the positive feeling. He forces himself to finish a boring novel he's halfway through, not wanting to waste his money.
Biases rarely arrive alone.
Understand more. Assume less.
188 biases, 18,869 scenarios, and a record of how you actually decide.
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