“Once that shift is accomplished, my investments will be in great shape. The sole exception is my Small Company Fund, which has performed poorly. I plan to sell this investment as soon as the price increases to my original cost.”
I would say first part representativeness and second loss aversion.
i would say loss aversion. based on lack of context, it seems the person is afraid to realize loss and would not sell the small cap fund at the moment.
maybe also endowment?
My shot is overconfidence and loss aversion.
Waldziuchna, why representativeness?
Because of judgement on stereotypes (sample sized neglect)-“once the shift is accomplished, my investment will be in great shape”. I could be wrong. Overconfidence also sounds appropriate. This shit is tricky!
Without any addition info on statement 1, it should be overconfidence, since we aren’t even sure if it’s based on anything. Overconfidence leads to believing in a higher chance to succeed. Two is lose aversion I think everyone agree witht that.
"I plan to sell this investment as soon as the price increases to my original cost.”
Someone is using an anchor there as well
Overconfidence and Loss aversion for me…
overconfidence and anchoring.
Anchoring!
Question to ask for detecting: Am I holding a stock based on rational analysis, or I am trying to attain a price I am anchored to?
Agreed.
am I trying to attain a price I am anchored to? YES
am I keeping it because it’s a loss? YES
I see both anchoring and loss aversion there - I would be really dumbfounded if both answers were proposed in the test!
OP pls deliver the right answer
could also be gamlbers falacy … expecting the investment to return to a certain level. Right??
Anchoring
then
Loss Aversion
agreed
Theres at least 5 - 6 biases in that
what about illusion of control. Isnt the first phrase signifying that?