It's almost like a natural tendency to want to have it both ways, in that we want to venture into the unknown and still retain the familiar safety of what we know.
Almost because I'm not very sure if it's actually a natural tendency. We have different personalities that rarely see eye to eye.
If I have to dive into the recesses of my mind for a possible reason why, then the concept of loss comes to the forefront.
I think loss is perceived as a fundamental threat to our constructed sense of self or rather our carefully built narrative of who we are and what we possess.
We want to keep winning, have all the best of what this world has to offer.
We want our investments in financial markets to keep going higher, our trades to be in profit and never at a loss.
Losing is more than a concept, however. It's a reality, more like an unavoidable reality.
The Mechanism of Avoiding the Unavoidable
The human aversion to loss is a fundamental aspect of our psychology that shapes our decisions and behaviors.
At its core, loss perceived as a fundamental threat to our sense of self has both ancient, biological roots and modern, learned reinforcements.
Biologically, the fear of loss likely stems from our ancestors' need for survival. Losing resources like food or shelter could spell the difference between life and death.
Our brains evolved to prioritize avoiding these negative outcomes and manifests today as "loss aversion," a well-documented cognitive bias where the pain of losing something is psychologically more powerful than the pleasure of gaining an equivalent amount.
I know sometimes there isn't really a tangible and sensible why for such things but I still have to wonder for example, why the sting of losing $100 feels more intense than the joy of finding $100?
Beyond biology, society reinforces this avoidance through subconsciously teaching us from a young age that "winning" is good and "losing" is bad.
Failure is stigmatized and mistakes are punished.
Such a kind of continuous messaging over time does influence our perception, making loss feel like a personal failing rather than an inherent part of any dynamic system.
I think in financial markets, this aversion is simplified because tangible numbers directly reflect gains and losses in real time.
That's why it's really not a good idea to make emotional decisions based on short-term market fluctuations.
For every noticed downward tick on a portfolio feels like a personal attack that triggers an emotional response far greater than the rational implications.
Trying to avoid loss at all costs is like trying to breathe without exhaling.
Near Topless Mountain
But then why do we resist the unavoidable?
Because acceptance of loss would require us to confront the fundamental impermanence of everything we hold dear.
Our ego-structure depends on the illusion of permanence and acknowledging that loss is truly unavoidable means being forced to question the very foundation of our attachment-based happiness.
Experientially, the mechanism kind of works like this.
We create meaning through accumulation, be it experiences, relationships, achievements, possessions, etc.
Each accumulation becomes part of our identity. Loss threatens not just what we have, but who we think we are.
So we develop elaborate defense mechanisms like insurance policies, backup plans, emotional walls, and even spiritual practices or philosophies as another form of acquisition to keep our sense of self intact and protected.
In a very practical level, the best thing we can do knowing that loss is unavoidable is to minimize its impact. And this often comes through unwinding the attachment we have with the temporary aspects of life.
This is super hard to do in practice, like climbing a mountain where each taken step merely reveals how much further there is to go. I myself I'm still exploring the first regions at the bottom.
Thanks for the r reading!! Share your thoughts below on the comments.