The Day the Purchase Price Haunts You: The Mind Pulled by Anchoring and How to Loosen It [Investing x Psychology]
The day when only the purchase price was vivid
First thing in the morning, when I open the board, the first thing my eyes go to is not "today's price movement"... but for some reason, my purchase price.
A stock I bought at 3,240 yen is now 3,200 yen. It's only a -40 yen difference, yet my chest feels strangely restless.
"At least come back to the purchase price"——Before I knew it, I was staring not at the chart, but at the "memory" of the number.
Today is about that "feeling of being pulled by the purchase price" = anchoring.
The movement of the heart on a day bound by the purchase price
That day, I was looking more at "the price I bought it at" than at the chart itself.
In my head, I know that "if I don't cut it here, the wound will only get deeper."
But somewhere in my heart, I am whispering, "At least until the purchase price...".
In the end, without ever touching the sell button, I just kept opening and closing my smartphone over and over.
Before I knew it, I think I was only concerned with "whether it will return to the purchase price", not "what to do with this stock from here on."
The psychology behind it—anchoring
Anchoring is a habit where the first number you encounter becomes a "ruler" that you cannot let go of.
In investing, "purchase price," "previous high," "target price heard from someone" and the like play the role of an anchor.
In reality, one should think about the value based on how much profit the stock is likely to generate from now on, but instead, one uses past numbers like "the price at which I bought it" as a ruler.
As a result,
I cannot sell below the purchase price
Thinking "it was cheaper before," I find it hard to buy even good stocks
I feel the "pain of realizing a loss below the purchase price" more than the risks that have already emerged
Such discrepancies arise.
Starting to grade based on the purchase price, saying "above the purchase price is good, below is bad"—this quietly distorts investment decisions.
Countermeasures for anchoring
Since it is difficult to completely eliminate anchoring, I try to be conscious of only these three things.
① Ask yourself, "What if I encountered this stock for the first time at this price?"
I set the "purchase price" aside for a moment, and if I were to learn about this stock for the first time at this current price, I ask myself, "Would I buy it or pass?".
If I still feel I "want to hold it," it's a candidate to hold; if I feel "no, I wouldn't buy it," I use that as a sign to consider selling.
② Temporarily reduce "purchase price information" from the screen
When unrealized gains/losses and the purchase price are displayed prominently, my eyes inevitably go there.
I take time to look only at the chart and financial information to confirm, "Does the reason for holding this stock still remain?".
It's an image of bringing my consciousness back to "whether the premise has changed" rather than the numbers themselves.
3. Do not use the "purchase price" when writing down your decisions
Instead of "I'll sell when it returns to my purchase price,"
I will sell if the scenario of XX falls apart
I will let go if the earnings report for △△ is released
I try to write my reasons based on "conditions" rather than "price."
By doing this, the moments where your judgment stops simply because "it's my purchase price" will gradually decrease.
Anchors are meant to be driven deep
The purchase price is an easy number for anyone to understand.
That is precisely why, once an anchor is driven into your heart, it is not easy to pull away from it.
Even I still have days when my purchase price flickers in my mind.
Every time that happens, I try to pause for a moment and ask,"If I were in my current position, would I really want to hold this from this price?"
To everyone who has read this far
What kind ofnumbersare you easily pulled by?
If you don't mind, I would be happy if you could let me know, such as "purchase price," "previous high," or "round numbers."
I would like to learn from you too (^-^)
Thank you for reading until the end.
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Related (if you want to read more)
・The heart on days you can't let go: How to return a "masterpiece" to just a "work" [Investment x Psychology]
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