The Past is the Past

This is a very good article from fellow advisor Carl Richards on the topic of mental anchoring . This is known as "stickiness" and has been a big issue in the real estate market over the past couple years as well as the stock market. What you paid for a house or a mutual fund or a stock does not make the price of that asset any different today. We need to realize that and approach our portfolios in current value terms instead of letting the past (what we paid) dictate our behavior.