The Sunk Cost Trap in Your Investment Portfolio

Why do investors hold onto losing stocks and funds long after they should sell? In this episode, Lucas and Luna explore the sunk cost fallacy through the lens of a real-world example: a listener who held a $15,000 position in a retail stock that lost 60% of its value over three years. They break down the psychology behind the bias, the difference between sunk costs and opportunity costs, and a simple decision framework to avoid throwing good money after bad. Lucas shares the 'empty room test' — a mental trick that separates rational forward-looking choices from emotional attachments to past expenses. Luna pushes back on the idea that selling is always the right call, using Warren Buffett's patience as a counterpoint. Listeners walk away with one concrete tool to check their own portfolio decisions. #SunkCostFallacy #InvestmentPsychology #BehavioralFinance #SellingLosers #OpportunityCost #WarrenBuffett #DecisionMaking #PortfolioManagement #LossAversion #EmotionalInvesting #EmptyRoomTest #RetailStocks #StockMarketPsychology #Finance #FexingoBusiness #BusinessPodcast #TheMoneyMindset #PodcastEpisode Keep every episode free: buymeacoffee.com/fexingo