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Which of these is a recognised tendency that can cause investors to hold onto a losing investment for too long?
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Confirmation bias
134 votes (29.0%)
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Survivorship bias
122 votes (26.4%)
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The sunk cost effect
140 votes (30.3%)
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Anchoring
66 votes (14.3%)
Total votes: 462
Answer: C — The sunk cost effect.
Explanation: The more time, money, or emotion we invest in something, the harder it can become to walk away – even when the evidence says we should. It’s one reason removing emotion from the initial screening process can be so valuable.