In the world of finance, understanding the psychology of investors is crucial. Behavioral finance or investor psychology plays a significant role in shaping financial decisions. One particular concept that has a profound impact on investment decision making is loss aversion. Loss aversion refers to the tendency for individuals to feel a greater sense of pain or negative emotional response when they lose money compared to the positive response when they make money. In this video, Private Wealth Advisor, Paul Blatz delves into the concept of loss aversion and how it can influence investment decisions.
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