Regret aversion bias - 2015 am exam Q11A

[archived_user]

Why wouldn’t client 1 buy additional shares?
regret aversion = fear of making decisions that turn out poorly or fear of not making decisions that turn out well (error of omission)
couldnt one argue the client wants wants to buy more shares as they’ve gone up?
i get the no action answer but was indifferent between that and the buy option

 

[archived_user]

easiest way to think about it is regret aversion = inability to make a decision (either way)

 

[archived_user]

2017 Mock says regret aversion can also cause investors to participate in a bubble beliving they are potentially missing out on profit opportunities as stock continues to appreciate - purchasing more shares - direct answer from CFA INSITUTE
This is from 2017 CFA Mock question 5