Disposition effect
The tendency to sell things that have risen in value too early and to hold on to things that have fallen in value too long, hoping to get back to even.
In everyday life
An investor sells a stock after a small gain to lock it in, but keeps one that has dropped 40 percent because selling would make the loss feel 'real.'
You quickly resell the concert tickets whose resale price went up, but hang on to the ones whose price dropped, waiting for them to climb back to what you paid.
Why your mind does this
Finishing what we start is usually a good strategy, since a brain that quit at every bump would never complete anything. Valuing what we already have, what we built and what we worked for keeps us committed and protects our resources. Losing what we have can hurt more than an equal gain helps, so caution around losses often makes sense.
Its family, in 30 seconds: Finishing what we started
How to spot it
Notice when your decision to sell depends on the price you paid, which has no bearing on what happens next.
How to counter it
For each thing you hold, ask whether you would buy it today at today's price, and act on that answer.