The Endowment Effect Why You Overvalue What You Own

Behavioral economist Richard Thaler coined the term 'endowment effect' decades ago, but it's quietly costing investors real money every day. In this episode, Lucas and Luna explore a 2024 study from the Journal of Financial Economics showing that investors who owned a stock for more than five years demanded a 40 percent higher selling price than non-owners would pay for the same stock. They break down a real-world example from the used-car market before connecting the bias to portfolio mistakes like holding onto losing positions too long or refusing to sell winners. The hosts also discuss a simple mental checklist used by Vanguard advisors to help clients overcome the endowment effect during rebalancing. No fluff, no alarms—just one concrete bias and how to spot it in your own decisions. #EndowmentEffect #RichardThaler #BehavioralFinance #InvestorBias #LossAversion #JournalOfFinancialEconomics #Vanguard #PortfolioRebalancing #SunkCost #SellingWinners #HoldingLosers #Finance #FexingoBusiness #BusinessPodcast #WealthBuilding #InvestmentPsychology #DecisionBias #MentalAccounting Keep every episode free: buymeacoffee.com/fexingo