"Brandes Investment Partners, the fund company, has recently done work based on insights from the Nobel prize winner Daniel Kahneman, known for his work on “prospect theory.” This theory demonstrates that investors feel losses twice as much as they do gains. As a result, the stress of losses can cause emotions to kick in and make investors abandon investments, even ones they intended to hang on to for the long term.
In his book, Fooled by Randomness, the mathematician and former trader Nicholas Taleb applied this theory to a portfolio that returns 15 per cent annually over 20 years, with 10 per cent volatility along the way. He calculated that someone with this portfolio would stand a 7-per-cent chance of losing money over the course of any given year, a 23-per-cent chance of losing money in a quarter, a 33-per-cent chance of losing money in a month, a 46-per-cent chance of losing money during a day and a 50-per-cent chance of losing money in any hour."
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Axiom 1- People hate to lose more then they like to win, by 2 times Axiom 2- even a return of 15% with 10% volatility over 20 years will take one on alot of losing days. Hence it follows that looking at one's portfolio will lead one to pull the plug and lose money even on a winnig hand... Excellent article
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