All of the following actions are consistent with feelings of regret except:

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BlackTom AI · Accepted Answer

The question asks which action is not consistent with feelings of regret in investing, listing three options to consider.
Option a: Following the crowd when making investment and disinvestment decisions. This behavior can be driven by fear of making a wrong move on one's own and wanting social validation, which aligns with regret avoidance in the sense of minimizing personal accountability. In many cases, investors imitate others to avoid the potential regret of choosing the wrong path alone. So this option can be consistent with regret-driven behavior.
Option b: Hiring a full-service broker. Delegating decisions to a professional can reduce an individual’s sense of responsibility for outcomes, thereby reducing personal regret if investments perform poorly. This aligns with a strategy to avoid or mitigate regret by outsourcing decision-making to someone perceived as more expert, making it consistent with regret-related considerations.
Option c: Selling losers quickly. In practice, the disposition effect suggests investors often hold onto losing investments too long due to the desire to avoid the regret of realizing a loss, hoping the price will rebound. Selling losers quickly would counter this common regret-driven tendency, as it reflects a willingness to realize a loss rather than endure potential future regret from a continued loss. Therefore, this option is not consistent with typical regret-driven behavior and stands out as the exception.
In summary, options a and b can be explained by regret-avoidance or regret-minimization dynamics, while option c contradicts the common regret inflation seen with holding losses, making c the exception among the given choices.

BFF5520 - S1 2025 Topic 6 Homework

All of the following actions are consistent with feelings of regret except:

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