Investment Tern For The Day - Loss Aversion 

Loss aversion in behavioral economics refers to a phenomenon where a real or potential loss is perceived by individuals as psychologically or emotionally more severe than an equivalent gain.

The psychological effects of experiencing a loss or even facing the possibility of a loss might even induce risk-taking behavior that could make realized losses even more likely or more severe.

Loss aversion is the observation that human beings experience losses asymmetrically more severely than equivalent gains.

Investors can avoid psychological traps by adopting a strategic asset allocation strategy, thinking rationally, and not letting emotion get the better of them.