regret can make investors stay out of certain investment,which can lead to concentrated portfolios. i cannot understand this.
You brought a stock at 10$, now it is 100$. You don’t know how much higher it will go, if you sell and it goes up, you feel regret. So you keep the stock. Because it appreciated a lot, the stock is a big part of your portfolio, reducing your portfolio diversification and increasing concentration. Hope this helps. Cheers 
On the other hand, if you have no knowledge of certain investments classes ( like real estate) and you buy it and it goes down, you feel regret " Why did I buy this asset?". So you stay out of certain asset classes and invest in assets familiar with like stocks…
amit_cfa2 Wrote: ------------------------------------------------------- > On the other hand, if you have no knowledge of > certain investments classes ( like real estate) > and you buy it and it goes down, you feel regret " > Why did I buy this asset?". > > So you stay out of certain asset classes and > invest in assets familiar with like stocks… this is in line with the notes . thx , both of u.