What investment practice is Cody likely following by holding onto poorly performing stocks?

Cody is likely focusing on sunk costs by holding onto poorly performing stocks. This investment practice occurs when an investor allows past investments, which have already been incurred and cannot be recovered, to influence their current decision-making. The sunk cost fallacy can lead investors to hold onto losing positions in the hope that they will recover, despite the fact that the original investment decision may no longer be justified based on current or future performance.

By holding onto these poorly performing stocks, Cody may be trying to avoid acknowledging a loss, which can cloud rational investment judgments and lead to further financial loss if the stocks continue to underperform. In contrast, other investment practices, such as diversifying investments or engaging in timely buying and selling, are strategies that typically focus on maximizing returns based on market conditions rather than being influenced by past costs. Focusing on potential future gains suggests a strategic approach to investment decisions based primarily on current market analysis and forward-looking performance expectations, which does not align with holding onto underperforming assets due to prior investments.