Loss aversion A Myth?

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Mark Melin
Published on
Updated on
James Montier

The belief that losses loom larger than gains is practically enshrined in investing and social science research. So when researchers from the University of Illinois at Chicago and Northwestern University reviewed a poll of those attending the 2016 Society for Judgment and Decision Making Conference in Boston, the results were not surprising. When asked if losses loom larger than gains, 96% of those affirmed the consensus opinion: yes, losses do loom larger than gains. This notion may not be entirely accurate, says new research. What might seem like a simple statement is actually filled with nuance and is really contextual?…

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Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.