How can you overcome the status quo, endowment, and attachment biases? The first step to overcoming them is to recognize that you may be subtly influenced by these problems. Reading this chapter is a good start. However, you should re-examine the investments in your portfolio.

Ask yourself, "If I had only cash, would I use the cash to buy these investments?" If your answer is no, then you are definitely suffering from an endowment or status quo bias. You need to make a change.

Making a change is hard. If it weren't, you wouldn't have a status quo bias. One factor that makes change difficult is your desire to make the right decision. In fact, you may fear making the wrong decision so much that you fail to make any decision. Think about a time when you and some friends wanted to go out to lunch. Does this conversation sound familiar? "Where should we go to lunch?" "I don't know. Where do you want to go?" "What do you think?" The important outcome of this conversation is getting to lunch. Picking the best restaurant is not nearly as important as getting a move on so that you can eat!

You have many investment choices. Which is the best investment? It doesn't matter! For example, consider that you have inher­ited some money or started to work for a company with a 401(k)

It is more important for you to get invested in a    Plan You can 4uickly °Pt t0 diversified portfolio than to spend the time to     choose a diversified Portfo

find the perfect stock or mutual fund.                      lio ±at Sives y°u a 10%

return. Or you can wait to

find an investment that offers 11%. The status quo bias may set in if you wait. It may take you a year to find and get invested in the higher return investment. If so, it will take you over 10 years in the 11% investment, after the delay, to catch up to the accumulation in the 10% investment. Get invested first, and then consider adjustments to perfect the investment later.

To be fair, it should also be noted that your status quo and endowment biases might help you in some cases. For example, if you stayed invested in the "old economy" firms and missed the big run­up and subsequent crash of the dotcom stocks, you probably have these biases to thank. Many people did get caught up in the euphoria of the Internet stock bubble.