Stocks have dropped, should I expect to come back to the price I bought?

If you've ever invested directly in stocks, you've probably been through the situation of holding on to a stock that fell even after you didn't have many expectations for the investment, in the hope that it would come back close to your purchase price and you could sell without loss. This behavior is quite typical, and comes from a cognitive bias in which we have a greater aversion to losses than greed for profits. You avoid selling the stock because crystallizing your loss is psychologically painful. This bias is easy to observe. Imagine a situation where you have to choose between a) winning R$ 5k for sure or b) having a 50% chance of winning R$ 10k. What would you choose? Most people prefer to be sure of earning R$ 5k. Now, imagine a similar situation. Would you rather a) lose R$ 5k for sure or b) have a 50% chance of losing R$ 10k? In this case, most people prefer 50% chance of losing 10K, hoping not to lose anything. In the case of stocks, it is this same bias that makes you hesitate when selling at a loss… However, note that your historical purchase price does not interfere in the future of the business in which you invested. It is information that should be completely ignored when deciding to sell. The best way for you to reflect on your decision is to frame the question differently: Would you buy this stock of yours again at the current price? If your answer is no, you should probably sell them.