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Staying The Course, or Anchoring?

Bogleheads • View forum - Investing - Theory, News & General - www.bogleheads.org
This is more a question on emotional behavior in investing than one asking for advice.

I was reading back through The Bogleheads Guide to Investing, and saw something in the chapter on emotional traps that caught my attention.

I have a position in FBIOX, a legacy of my initial foray into mutual fund investing (when I thought "diversification" meant "buy lots of different sector funds"). It did pretty well for a while after I bought in, but long story short, it's down now 33% from when I bought it. The position is not a huge one (less than $10k), and I am not in need of those funds at present and see no immediate need down the road, so I'm not in any hurry to sell, especially when it would lock in this sort of loss.

On the other hand, in reading the Guide, the section on "anchoring" sort of struck a familiar note.

So I got to wondering: does hanging onto this position constitute anchoring, or just avoiding a panic sell?
Date: Mar 7, 2016   


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