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You don't put that money in a stock market. And than it goes up by 10%. What's worse? Either way you've lost money you could have had. Humans tend to be loss a
by UK-AL 11y ago
You don't put that money in a stock market. And than it goes up by 10%. What's worse?
Either way you've lost money you could have had. Humans tend to be loss averse though.
In both situations you probably have liquid equivalents at hand
- ryandrake 11y agoLosing 10% is clearly worse than losing 0% while watching someone else (irrelevantly) gain 10%.
- UK-AL 11y agoIt's opportunity cost. If it goes up 10% without putting money. That's 10% you could have had if you made the right decision. The stock market going down 10%. That's 10% you could have had, if you made the right decision. Logically its the same. However humans loss averse, which makes one seem worse.