 this section is on loss aversion so loss aversion is another factor which brings bias in investment decision making or financial decision making so bias means that you cannot take the correct decision in your decision there is a problem or error so we are calling it bias so loss aversion means that it has been observed that generally if you are facing a loss of ₹1,000 more than that, as compared to a gain of ₹1,000 or a gain of ₹1,000 so more than that, as compared to a loss that reaches them so this particular phenomenon explains, this particular example explains the concept of loss aversion so loss aversion means that when we perceive a loss of ₹1,000 or a gain of ₹1,000 psychologically or emotionally more severe as compared to an equivalent gain this means that as I have told you if someone gets ₹100 from the loss of ₹1,000 and the loss of ₹100 from the loss of ₹1,000 the loss of ₹1,000 is more than the loss of ₹1,000 generally people take more of the loss of ₹1,000 as compared to a gain of ₹1,000 wow, that is not equal to ₹1,000 this particular psychological effect of ₹1,000 is that people get a fear of ₹1,000 due to loss and instead of taking rational decisions due to the fear of ₹1,000 when they take irrational decisions and when they take irrational decisions then there is a possibility that the decision that they make is not correct that is incorrect or a bad decision that is an inappropriate decision and why are we going towards that inappropriate decision because we are afraid that as soon as we have a loss or there can be a loss that loss is not there to avoid that loss you did not make a rational decision you went towards an irrational decision and went towards a bad decision and in that the stock that you have as a result of irrational decision making you can use it for a long time or you can quickly understand that you think that you will get a loss you can immediately sell it to the market so what happened with doing this you made an irrational decision so maybe eventually you see that you have made a wrong decision because of the loss aversion factor now how can we avoid this particular thing when we know that because of the loss aversion effect we can make a wrong decision so we should pay more attention to our rational decision making we should pay more attention to it and according to the facts and figures we should make our own decision not that we are emotional we should come under some fear and make the same investment decision so in this way you can overcome the bias caused by loss aversion