And you dislike losing about 1.5 to 2.5 times more than you like winning. This is called the “loss aversion ratio.” It explains why, when faced with tough choices such as where a sure loss is ...

The human propensity to select low-risk choices instead of potentially higher-profit options defines risk aversion. The economic and financial domains heavily rely on this concept because it explains ...

This phenomenon reflects loss aversion, and Spencer mentions that this investing bias is normal. "Loss aversion is natural and affects everyone. People seek pleasure and want to avoid pain," he says.

Medicare premiums and maybe even long-term care costs. Our investment behaviors can change, too — without a steady paycheck, we may develop greater loss aversion, or fear of losing money in the ...