(New York)

If behavioral finance has taught us one thing, it is that losses hurt the human mind more than gains help it, and that truth might be behind why the market has been so resilient over the last year. Despite major turmoil in domestic and international politics, stocks have been rock steady and very strong, with many consistently “buying the dip”. Well Barron’s argues the reason for this behavior, and in turn, why the market has done so well, has to do with this concept—that investors have so many gains from past years that they feel like they are “playing with house money”, or that they have little to lose because they are only risking gains.

FINSUM: Evidently, research suggests that people are more likely to take risks with capital they consider “house money” than with their own money, which could explain the almost inexhaustible “buy the dip” mentality.