Realizing losing investments and experiences

In 1998, Terrance Odean wrote a paper about how many of us hold our losing investments for too long, and sell winning investments too soon. Selling a losing investment is tough because in order to let go of it, we need to realize and accept that it’s a loss. We need to admit that there’s a better way to invest the money, and it’s not this one. It involves closing up the possibility of hope in the losing investment, and moving that conviction into one with a better chance of winning. It takes the courage to miss out on potential gains. This is analogous to other experiences of loss as well. Friends and family passing away. Difficult memories from the past. It involves the realization that something has hurt, the moment has passed, and there’s scar tissue now. There’s no way to make it right, though there might be a way to get closure. It was a losing experience (in the same sense as a losing investment). The first step to let go of it is to acknowledge the grief. Running away or being…