Myopic loss aversion is loss aversion plus looking often. Over a single day, a share portfolio falls almost as often as it rises; over ten years, far less often. So the more often you check, the more losses you see, and each one weighs roughly twice what a gain does. Shlomo Benartzi and Richard Thaler proposed the idea in 1995 to explain why investors demand such a high return for holding shares.
A 1997 experiment tested it directly: people shown their results often put less into the riskier option, and ended up with less, than people shown the same investments' results less often. Most of what moves in a day is noise — movement that says nothing about the business. Your checking frequency is yours to choose; the research shows which way it pushes, not what it should be. The app sends no price alerts or push notifications, and its dashboard leads with longer views: Gainers & Losers opens on one month, the value chart on All, and the day's move is a small figure beside your return.
What the 1997 experiment found. It describes a tendency, not a rule for how often to look.
SOURCES
- Benartzi, S. & Thaler, R. H. (1995). Myopic loss aversion and the equity premium puzzle. Quarterly Journal of Economics, 110(1), 73–92.
- Thaler, R. H., Tversky, A., Kahneman, D. & Schwartz, A. (1997). The effect of myopia and loss aversion on risk taking: an experimental test. Quarterly Journal of Economics, 112(2), 647–661.
Educational content only. It is not personal financial advice.