Framing Effect
A cognitive bias where the SAME choice leads to different decisions depending on how it is described -- as a gain versus a loss, or a survival rate versus a mortality rate. Because losses hurt more than equivalent gains feel good (loss aversion), a portfolio described as "down 10% from its peak" feels worse than the same account described as "up 5% for the year." Investors who deliberately reframe a holding as "cash I could redeploy today" tend to make cleaner sell decisions than those anchored to what they originally paid.
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Related terms
Adjusted Cost Basis · Annuity · Capital Gains Distribution · Capitalized Interest · Cost Basis · Dividend Discount Model (DDM)
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