He asked over 2,000 retail investor clients of Barclays how happy they were with the returns on their equity holdings. He found that when they were asked about prospective returns, investors who anticipated gains were much happier than those who expected losses. Nothing at all surprising there. However, when they were asked about actual recent returns, the differences in happiness between winners and losers were much smaller. People who had done well reported less happiness than expected, while people who had suffered losses were less unhappy than expected. "People are better at coping with losses than they think they'll be," says Professor Merkle.
One reason for this might simply be that, quite often, high prices mean lower subsequent returns while low prices should mean higher expected returns. To this extent, investors who have lost might comfort themselves with the thought that their portfolio might bounce back, while successful investors might fret that the good times won't last.