Investors attempt to avoid regret by holding on to losers hoping the stocks will rebound. If the stock rebounds to its original purchase price, the stock can be sold with no regret. To avoid regret, the investor might select low risk stocks (overly conservative). The investor also might try to avoid regret by distancing themselves from their decisions by hiring a full-service broker.

Roberts uses frame dependence as the basis for his decision making. He places more weight on the financial publication just because it specializes in investments without evaluating the investment advice on its own merits.

Shrum refuses to follow a stock after she sells it because she does not want to experience the regret of seeing it rise. The behavioral characteristic used for the basis for her decision making is the fear of regret.

Marget is likely to have a poorly diversified portfolio because her fear of regret will encourage her to stay in comfortable investments. This could lead to a lack of variety in her portfolio and a poorly diversified portfolio. She will avoid risky stocks and tech stocks because the risk of them could cause her to experience more regret. Her fear of regret would not necessarily cause her to depend on financial publications to guide her investment strategy.

Barth is most likely to use dividends and coupon income instead of the sale of stock to fund living expenses. He does so because he does not want to experience the potential regret from selling profitable investments. This would be necessary if he were to sell stock instead of using dividends and coupon income to fund living expenses. If Barth has a fear of regret, he will not have a well diversified portfolio because he will want to make comfortable investments. So he would not use modern portfolio theory which states that investors should hold well diversified portfolios.