“I’m Not Selling Even If It Goes to Zero” — The Psychology Behind Retail Investors Holding Large Losses
An instant behavioral investing guide that explores why some investors freeze when deeply in the red, how this impacts market dynamics, and whether institutions behave any differently.
“The deeper the loss, the harder it becomes to act — and that inaction shapes what happens next.”
The Spark: A Real Quote From a Retail Investor
“I’m down around 25–30% on Apple 🤦♂️ Now I’m not selling, even if it goes to zero.”
That quote — from a real investor — says a lot about how psychology affects behavior in the market.
On the surface, it might sound like conviction or loyalty. But underneath, it reflects:
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Loss aversion
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Cognitive dissonance
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Ego attachment to an investment
And when thousands (or millions) of retail investors feel the same way about a stock — especially a major one like Apple — it can shift the very dynamics of supply and demand.
The “No Return” Point: When Losses Paralyze Action
When investors lose a small amount, they often try to cut losses or reassess. But when the loss grows to 25–30% or more, something else happens:
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The investor feels defeated
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Emotionally, they cross into “hope mode”
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They stop making strategic decisions and instead adopt a passive stance
At that point, the thinking often becomes:
“I’m already down big. Selling now would make the loss real.”
But the truth is — the loss is already real. What matters is what happens next.
Oversold, But With Fewer Sellers
Ironically, when enough investors feel this way, the stock can appear technically oversold, but still:
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Doesn’t drop much further
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Begins to stabilize due to a lack of active sellers
Everyone is frozen. No one wants to lock in losses. Selling dries up — not because sentiment improves, but because participants feel stuck.
This creates the classic late-stage selloff profile:
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Volume drops
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Selling pressure fades
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Price action flattens or grinds sideways
Until something changes — news, a technical break, a new buyer class steps in — the stock just sits there, heavy and numb.
Do Institutions Think the Same Way?
It’s easy to assume only retail investors fall into emotional traps. But the truth is: institutions are made up of people too.
Portfolio managers and CIOs may have their own versions of “I’m not selling”:
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“Apple dropped too far — we’ll hold and wait for a bounce.”
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“Let’s reduce exposure after it rebounds 5–10%, not here.”
They might not say it with emojis, but the thinking is strikingly similar.
Even at institutional levels:
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There’s reluctance to realize large losses
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Exit plans get delayed
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Risk committees hesitate to sell quality names at steep discounts
So while institutions have more tools and structure, they’re not immune to anchoring, bias, or hope-based strategy.
What This Means for Investors Observing Oversold Stocks
If a mega-cap stock like Apple has:
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Declines apx 35% from their high, withn a very short period time
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Reached a round-number psychological level
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Shown signs of slowing momentum on the downside
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Lower volume than previous selloffs
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Its RSI on the daily chart is at 20, well below the ‘oversold’ 30 mark
It may reflect a saturated selling zone — not necessarily a reversal, but a pause in pain.
From here:
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Institutions may quietly rotate out into strength
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Retail may wait forever for “even”
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Volatility may compress until a new catalyst arrives
Final Thought: Losses Are Psychological Before They’re Strategic
If you ever hear yourself saying, “I’m not selling, even if it goes to zero,” — pause. That’s not a strategy
