Hi, I'm wanting to hear from experienced investors on this one. I think a lot of people fall prey to the sunk cost fallacy, and I would like to know why.
let's say person A invested in Google two years ago and is up 100 percent, but owns 100k worth today
let's say person B invested in Google two months ago and is down like ten percent, but owns 100k worth today.
It seems like most people would advise person A to hold, but advise person B to cut their losses. but why? the two portfolios are identical. Your previous entry point doesn't affect whether google will gain or lose money in the future.
so why do people do this? why are they more comfortable holding in bad positions, just because they previously made money on them?