A stoic approach to risk aversion

From a stoic perspective, we recognize that loss aversion—the idea that people tend to strongly prefer avoiding losses to acquiring equivalent gains—is a natural human tendency that we should acknowledge but not allow to unduly influence our actions and judgments.

1. We recognize our inherent biases. We believe in understanding and accepting the realities of human nature. We acknowledge that loss aversion is a common cognitive bias, but we strive to be aware of its influence and to mitigate its effects through reason and perspective.

2. We focus on what we can control. We emphasize directing our attention to what is within our sphere of control. We recognize that losses and setbacks in life are often beyond our control, and we focus instead on our responses and actions, which we can control.

3. We maintain equanimity. We stress the importance of maintaining a stable and rational mindset in the face of both positive and negative events. We strive to not be overly affected by the pain of losses or the pleasure of gains, but to maintain a balanced perspective.

4. We reframe losses as opportunities. We view adversity and setbacks as opportunities for growth, learning, and the development of resilience. We seek to reframe losses not as purely negative events but as chances to learn, adapt, and become stronger.

5. We keep a broader perspective. We try to maintain a broad, long-term view of life and not get bogged down in temporary setbacks. We strive to see individual losses in the context of a larger journey or goal and to maintain our course despite short-term adversity.

6. We practice gratitude. We emphasize being grateful for what we have rather than focusing on what we have lost. By regularly practicing gratitude, we help counter the psychological effects of loss aversion.

In essence, our stoic approach to loss aversion involves acknowledging its existence as a natural human tendency but striving to overcome it through reason and perspective, focusing on what we can control, maintaining equanimity, reframing losses as opportunities, keeping a broader view, and practicing gratitude. Our goal is to make decisions based on reason and virtue rather than a fear of loss.