Asset Allocation & Risk
What is mental accounting?
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Mental accounting is the tendency to divide money into different mental accounts, valuing the same amount differently and spending or investing it differently as a result.
In investing, it can show up as tallying gains and losses separately for each stock and losing sight of the portfolio as a whole. It helps to view all your assets as a single portfolio and manage its overall risk.
This answer is general financial information as of 14/10/2026, not investment advice. Rules and tax rates change, so please also check the latest guidance from the source institution.
