Myopic loss aversion helps explain why many people hesitate to invest in stocks despite positive long-run returns. Which of the following are correct?

Question

Answer

People who check their portfolios very frequently are exposed to many short-term losses, which trigger loss aversion and make stock investing feel painful.

Answer

Stocks lose money on average in the long run, so avoiding them is rational.

Answer

Evaluating the portfolio less frequently (e.g., annually instead of daily) makes stock investing feel more pleasant because at longer horizons positive returns dominate.

Answer

Losses hurt psychologically more than equivalent gains feel good (loss aversion).

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Myopic loss aversion helps explain why many people hesitate to invest in stocks ...

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