loss aversion Vs regret...???

There are two dimension in these kind of behavioral questions. One is identifiying, another is the potential investment implication. I believe that regret will lead investor to avoid stock (or risky assets); Loss aversion will lead to risk-seeking behavior. Did I understand these implication correctly??? Thanks.
 
I think Loss aversion is easy, it is as bigwilly says above “Loss Aversion causes investors to often have a difficult time selling a security which has lost value.”
Regret is a little tricker but I am going with that it is when an investor avoids making a decision because they are afraid that it will be a wrong decision. The example that I have seen used is not selling a winning security when they should (i.e. to rebalance the portfolio) and holding on to it longer in case in keeps going up.
but I think you can regret the things you don’t do as much as the things you do, in fact probably more but I belive CFAI disagrees.
 
Here’s hwo I’ll know it:
Loss Aversion - don’t want to sell it b/c its at a loss
Regret - dont’ want to sell it b/c they beleive it still has potential to go up in value and don’t want to regret selling it and missing the gains.
 
loss aversion = become risk seeking in the face of losses (buy insurance), and become risk averse in the face of gains (same person buys lottery tickets). Therefore if you are experiencing losses you may ‘double down’ with the hopes of breaking even. If you are up, you are likely to lock in your gains, often too soon. Think about how people act at a casino.
regret aversion = failure to act in any case for fear of regretting making the wrong decision.
 
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