The Next Big Crash - Are You Prepared?

[Dividend Warrior]

I believe people are more psychologically affected by loss than gain. While gain can make people ecstasy, loss can make people doubly panic. Especially over a short period of time.

It's called "Loss Aversion", part of Behavioural Finance. You can google it to read up more.

There's also something called "Over-Reaction Bias" which teams up with loss aversion to have a very potent effect on share prices.

Yes. I read about this phenomenon before. The scary part is, we may think that a young adult's risk aversion is lower than a retiree. But no, according to studies, it affect all ages......

I guess it is our subconscious primal 'survival instincts' passed down from our cave-dwelling ancestors.....live to fight another day.....