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How the Endowment Effect Impacts Investing

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How the Endowment Effect Impacts Investing

S
sri

0 Views • Nov 11, 2025

Description

The Endowment Effect causes investors to overvalue the assets they already own simply because they own them. This bias often leads to holding underperforming stocks for too long or resisting portfolio changes. By recognizing this tendency, investors can make more rational decisions based on value and performance rather than emotional attachment.