| Course | FIN 340 Fundamentals of Investments |
|---|---|
| Module | Module 8 |
| Paper type | undergraduate discussion post on investor behavior |
| Length | About 380 words, 3 pages |
| Format | APA 7 student paper |
| School | Southern New Hampshire University |
| Program | BS Finance |
| Updated | October 2026 |
Free sample paper for FIN 340 Module 8
Module Eight Discussion
The Call in April
On April 8, 2025, Tessa Lindqvist, the composite 29-year-old hygienist in our course, called her adviser. The S&P 500 had dropped about 19 percent from its February record after the tariff announcements of April 2, and her 401(k), opened in January in a target-date fund, held about $1,700 after losing a little over $250, a small sum next to a red minus 13 percent on her screen. She wanted to move everything into the stable value fund "until things calm down."
Kahneman and Tversky (1979) found that people weigh losses roughly twice as heavily as equal gains. Tessa's $250 loss felt larger than the same gain would have felt good. Benartzi and Thaler (1995) added that looking often makes it worse: investors who judge their portfolios over short periods see losses more often and so demand more to hold stocks, and they estimated that a yearly evaluation period would explain the large premium stocks have paid over bonds. Over a day or a week, stocks fall almost as often as they rise; over decades, they have rarely lost money. Tessa had installed her plan's app in March and checked it every evening, so she was experiencing her 36-year investment through daily losses.
Behavior can fail in the other direction too. Odean (1998) found that individual investors tend to sell winners too early and hold losers too long, the disposition effect. Tessa's urge was a cousin of it: selling after a drop locks in a loss that would otherwise have been temporary.
On April 9 a 90-day pause on most of the new tariffs was announced and the S&P 500 rose about 9.5 percent in one day. By late June it had reached new records. Selling on April 8 and buying back later would likely have cost Tessa more than the loss she feared. The adviser did not predict that recovery; the plan simply never depended on predicting it.
Automatic contributions, a written policy statement, a fund that rebalances itself and checking the balance quarterly instead of daily would keep Tessa in her plan through the next drop.
Have you ever sold, or wanted to sell, during a decline? Looking back, was it a bias or a reasonable change in your plans?
References
Benartzi, S., & Thaler, R. H. (1995). Myopic loss aversion and the equity premium puzzle. The Quarterly Journal of Economics, 110(1), 73-92. https://doi.org/10.2307/2118511
Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263-291. https://doi.org/10.2307/1914185
Odean, T. (1998). Are investors reluctant to realize their losses? The Journal of Finance, 53(5), 1775-1798. https://doi.org/10.1111/0022-1082.00072
What the FIN 340 Module 8 instructions ask for
The final FIN 340 discussion generally asks about behavioral finance: how emotions and mental shortcuts lead investors away from rational decisions, and what investors or advisers can do about it. Prompts may name biases such as overconfidence, loss aversion, herding, anchoring or the disposition effect, or invite a personal look at how your own habits could shape your investing. Strong initial posts pick one or two biases, show them at work in a real event or decision and suggest a practical way to counter them, drawing on research. Keep it to a few hundred words with a source or two, and use replies to connect a classmate's bias to a market episode they may remember.
How this FIN 340 Module 8 discussion example is built
The sample uses the April 2025 market drop. After tariff announcements on April 2, the S&P 500 fell about 19 percent from its February record by April 8, and the composite hygienist from earlier modules asked to move her 401(k) to stable value. The post explains loss aversion through Kahneman and Tversky and myopic loss aversion through Benartzi and Thaler, showing why checking a balance often makes stocks feel riskier than they are. It mentions Odean's disposition effect as the opposite mistake. It then notes the 9.5 percent one-day rally on April 9 and new highs by late June, and suggests habits such as automatic contributions and fewer balance checks.
Where the FIN 340 Module 8 rubric puts the points
This discussion is commonly graded on understanding of behavioral finance concepts, accurate application to an example, use of research, practical recommendations and engagement with peers. The best posts explain the mechanism of a bias, not just its name, connect it to a real decision and propose a countermeasure that fits the investor. Posts lose points for listing many biases with one-line definitions, for examples that do not match the bias described and for advice that amounts to "stay calm." Replies earn credit when they test whether a classmate's example reflects a bias or a sensible response to new information. A countermeasure that the named investor could actually keep up, such as fewer balance checks, tends to score better than general advice.
FIN 340 Module 8 help: the mistakes that cost points
The easy version of this post lists five biases with definitions. Choose one or two and show them working inside a real decision, with dates and numbers, so a reader can see the bias rather than just read its name. Explain why the bias exists, not only that it does. Then be careful with hindsight: the market recovered quickly in 2025, but the argument for staying invested should not depend on knowing that. Make your recommendation practical, such as automatic contributions, a written plan or looking at the balance less often. In replies, ask whether a classmate's example was a bias or a reasonable change in plans, which is often a closer question than it seems.
Get FIN 340 Module 8 written to your instructions
Share the FIN 340 Module 8 discussion prompt. We connect a behavioral bias to a real market moment and one investor, explain it with research and close on a question classmates can answer from experience. About two days; the first post is free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Southern New Hampshire University document.
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FIN 340 Module 8 questions, answered
Where can I find a free FIN 340 Module 8 Discussion sample?
This page has the full FIN 340 Module 8 post on a young investor's urge to sell in the April 2025 market drop, explained with behavioral finance research.
What is loss aversion?
The tendency to feel a loss more strongly than an equal gain; Kahneman and Tversky found losses weigh roughly twice as heavily, which can push investors to sell after declines.
What is myopic loss aversion?
Loss aversion combined with frequent checking of results: the more often investors look, the more often they see losses, so they treat risky assets as riskier than they are over long horizons.
What is the disposition effect?
The habit of selling investments that have gained too soon and holding losing investments too long, documented by Odean in individual brokerage accounts.
How can investors avoid emotional decisions?
By setting a written plan, automating contributions and rebalancing, checking balances less often and agreeing in advance on what would justify a change.