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Status quo bias

A preference for leaving things as they are: inaction feels safer than action even when the circumstances the portfolio was built for have changed.

How to read the number

It is tested by a thought experiment: if the whole portfolio were in cash today, would you buy the same set in the same proportions.

When the metric lies

An absence of trades gets taken for discipline. The difference is that discipline follows a written rule, while the bias merely postpones the review until it becomes unavoidable.

Also known as: preference for inaction

Related terms