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We’re told investing is about numbers. But anyone who’s spent a few years in the market knows the real game isn’t played on the screen. It’s played in your head.
In fact, experience has taught me every portfolio has two parts – the one in your demat account, and the one in your mind. And it’s often the second one that holds us back the most.
The numbers do matter. But what really decides whether you succeed or suffer is your inner weather, which includes your temperament, your emotions, your stubborn beliefs, and most dangerously, the baggage you carry in your mind.
If you’ve ever said to yourself, “I’ll sell this stock when I get my money back,” welcome to the club. Or maybe you’ve held on because you didn’t want to ruin your “track record.” Or you kept telling yourself, “Maybe it just needs more time.” On the surface, these sound rational and responsible. But dig deeper and they’re not logic, but they’re fear wearing a tie.
As I’ve experienced, over time, these little mental voices become heavy anchors. They keep you chained to the past. It may be an entry price, a thesis that didn’t work out, or a promise you made to yourself that now feels more like a trap.
And while you’re stuck looking backward, the market, the world, and the future move on without you.
Now, what’s going on here isn’t just indecision. It’s loss aversion, which is a feature of our brain that says, “Losing ₹100 hurts way more than gaining ₹100 feels good.” So, we cling to losses. We cradle our mistakes, thinking time will heal them. But time doesn’t heal every stock. Some just decay while you wait.
Even worse, there’s regret aversion, or that voice inside that says, “What if I sell and it goes up right after?” That fear of being wrong twice, first by buying it, and then by selling it too soon, keeps us frozen. So instead, we do what feels safer: nothing.
And then there’s the old villain, the sunk cost fallacy. You researched that company. You read five annual reports. You listened to the management call. You recommended it to your friends. You even tweeted your conviction so the world notices.
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Overall, you’re not just invested with your money, you’re invested with your identity. Selling now feels like betraying the ‘smart’ version of yourself who once believed in it. So, you keep watering the stock like a dying plant, hoping a miracle bloom will prove you right.
But here’s the uncomfortable truth: the money you spent, the time you invested, and the reputation you attached…it’s all already gone. What remains is the decision in front of you: Is this still worth owning today, knowing what I know now? If the answer is no, then holding on is not prudence but pride. Or worse, paralysis.
I’ve done this myself, and not just once. I’ve held on to a stock long after the music stopped playing, just because the pain of admitting I was wrong seemed harder than the actual financial loss. And each time, it cluttered not just my portfolio, but my thinking.
The mind, just like a portfolio, has limited space. One poor decision, if left unresolved, can eat up all the emotional bandwidth you need to make your next good one. It’s distracting and draining. Also, it dulls your ability to think clearly.
So maybe the question we need to ask more often isn’t “What’s this stock worth?” but “What is this stock costing me – mentally, emotionally, and cognitively?”
Because if you don’t declutter the portfolio in your head, it won’t matter how clean your spreadsheets look. You’ll still be investing with foggy glasses.
And that, more than any loss, is what truly holds us back.