# Loss Aversion

*Behavioral Finance — Finicade finance glossary*

Loss aversion is the finding that losses hurt roughly twice as much as equivalent gains feel good. It explains why investors check portfolios less in downturns, hold losers to avoid realising the loss, and demand large premiums to accept small risks of loss. It is not the same as risk aversion: someone loss-averse will take a bigger gamble to avoid locking in a loss, which is risk-seeking behaviour in the losses domain.

**Also known as:** losses loom larger, loss averse

**Related terms:** [Prospect Theory](https://finicade.com/glossary/prospect-theory), [Disposition Effect](https://finicade.com/glossary/disposition-effect), [Risk Tolerance](https://finicade.com/glossary/risk-tolerance), [Regret Aversion](https://finicade.com/glossary/regret-aversion), [Behavioral Biases](https://finicade.com/glossary/behavioral-biases)

**Taught in:** Charter Climb — Behavioral Finance & Fintech

Source: https://finicade.com/glossary/loss-aversion